Premier Oil PLC (LON:PMO) told investors that the Catcher oil field ramp-up has now seen production exceed 60,000 barrels of oil per day, driving the group production rate above 90,000 barrels oil equivalent per day.
The rate averaged 74,000 boepd for the first quarter, Premier said in an update ahead of today’s annual general meeting.
It said the company remains on track to hit production guidance of 80,000 to 85,000 boepd.
Premier noted that first quarter cash flow would be neutral which, as previous communicated, reflects the phasing of the group’s 2018 capex programme, the Catcher ramp-up and still pending receipt of asset disposal proceeds.
It highlighted that a significant reduction in group debt is anticipated in the second half of this year.
"The improved commodity price environment puts us in a strong position to generate significant free cash flow in the second half of the year,” said Tony Durrant, Premier chief executive.
“The underlying production portfolio is robust, Catcher has reached 60 kbopd, our low cost base has been maintained, capital spend is reducing and we have announced further non-core disposals.
“We are on track to deliver our plan of material debt reduction in 2018 and 2019 with selective investment in our future growth projects from 2020, once balance sheet strength has been restored."
Looking at future growth, Premier noted that the Tolmount project in the North Sea is due for a sanctioning in the second half of this year, meanwhile, offshore Mexico, it plans to spud the first appraisal well for the potentially vast Zama discovery.
It has continued to pick up new early stage assets – securing licences in Indonesia and Mexico – and at the same time it continues to look at the disposal of non-core assets.