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Barclays says Premier Oil is “back on track”

Barclays continues to rate Premier Oil as 'overweight' and a new price target is set at 135p

oil and gas operations
Hosie forecasts Premier Oil’s cash flow rising to around US$470mln in 2019

Barclays Capital described Premier Oil PLC (LON:PMO) as being “back on track”, although its price target for the oiler reduced somewhat.

The bank’s rating was retained as ‘overweight’ while a new target was set at 135p, down from 145p.

WATCH: Premier Oil in a strong position to generate significant free cash flow

“We view Premier as an attractive option for investors seeking exposure to further improvement in medium-term oil prices,” Barclays analyst James Hosie said in a note.

He added: “Using our base oil price assumptions we forecast Premier can generate free cash flow of around $300m in 2018E, bringing its leverage ratio back below management's target of 2.5x ahead of schedule.”

Hosie forecasts Premier Oil’s cash flow rising to around US$470mln in 2019.

“Investors can anticipate a debt refinancing and possibly the reintroduction of shareholder returns alongside disciplined investment in opportunities to create further value,” Hosie added.

Quick facts: Premier Oil PLC

Price: 94.62 GBX

Market: LSE
Market Cap: £786.78 m

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