Tony Durrant, Chief Executive, commented:
"First half operating cash flows increased year-on-year driven by reliable production, our hedging programme and operating cost savings of 30 per cent. With Solan on-stream later this year and Catcher in 2017, we expect both growing production and reduced debt levels. Amended financial covenants announced today provide balance sheet flexibility and demonstrate the on-going support of our capital providers. With the optionality in our portfolio, we are well placed for growth in a stronger oil price environment."
Operational highlights
Production averaged 60.4 kboepd (2014 H1: 64.9 kboepd), despite recent disposals of non-core assets; full year guidance is maintained at 55 kboepd
Increased momentum across sanctioned developments; Solan first oil is still targeted for Q4 2015 and Catcher first oil on track for 2017
Progressing Vette and Sea Lion for 2016 investment decisions; ongoing engagement with the supply chain indicates significant potential for reduced costs
Discoveries at Zebedee and Isobel Deep, Falkland Islands and incremental resource added at Anoa Deep, Indonesia; ongoing programmes in Norway, Falklands
New venture focus on building portfolio in Ceará Basin, Brazil and Sureste Basin, Mexico
Formal sales process for Pakistan assets initiated
Financial highlights
Strong operating cash flow of US$513.0 million (2014 H1: US$499.4 million)
Profit before tax and impairments of US$170.6 million (2014 H1: US$194.4 million); non-cash post-tax impairments of US$225.7 million result in loss after tax of US$375.2 million (2014 H1: profit after tax of US$172.7 million)
Operating cost and gross G&A savings of 30 per cent and 20 per cent
Amendments to Premier's debt covenants secured out to mid-2017
c.60 per cent of 2015 H2 liquid volumes hedged at US$92/bbl; c.25 per cent of 2016 liquids hedged at US$69/bbl
2015 full year capex guidance unchanged at US$900 million (development) and US$240 million (exploration); US$500 million of total capex expected for 2016
Net debt marginally lower at US$2,093 million; cash and undrawn facilities of US$1.5 billion
