Premier Oil plc (LON:PMO) Full Year Results for the year ended 31 December 2018.
Tony Durrant, Chief Executive Officer, commented:
“2018 saw higher production, positive free cash flow and a return to profitability. The Group is ahead of plans to restore balance sheet strength and remains focused on consistently delivering free cash flows. Growth projects such as Tolmount, Zama and Sea Lion, together with promising exploration in Mexico and Indonesia, are being advanced within a disciplined financial framework.”
2018 Operational highlights
· Record production of 80.5 kboepd (2017: 75.0 kboepd)
· Catcher oil plateau rates increased to 66 kbopd (gross)
· Tolmount Main (UK) gas project sanctioned; estimated peak production of 58 kboepd (gross)
· Highly prospective new licences secured offshore Mexico and Indonesia
· US$73.4 million of cash receipts from non-core asset disposals
2018 Financial highlights
· US$133.4 million post tax profit (2017: post tax loss of US$253.8 million)
· EBITDAX increased to US$882.3 million, up 50% (2017: US$589.7 million)
· Cash flows from operations of US$777.2 million, up 64% (2017: US$475.3 million)
· Opex of US$10/boe with additional lease costs of US$7/boe; low cost base maintained
· Total capex (development, exploration and abandonment) of US$353 million, below forecast
· US$181 million debt reduction from accelerated conversion of convertible bonds
· Year-end net debt of US$2.3 billion, down US$393 million (2017: US$2.7 billion)
· Covenant leverage ratio reduced to 3.1x (2017: 6.0x)
2019 Outlook
· Production guidance of 75 kboepd, a 5% increase after disposals; 89 kboepd year to date
· Cash margins expected to be 30% higher at comparable commodity pricing
· Opex (excluding lease costs) and capex guidance of US$13/boe and US$340 million, respectively
· Project sanction of Catcher Area additions (Catcher North and Laverda) anticipated 1H
· Zama, Tolmount East appraisal programmes to complete Q3
· Formal loan application for Sea Lion funding to be submitted in Q2
· Material free cash flow, driving further debt reduction of US$250 million to US$350 million
