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Premier Oil PLC

Premier Oil on track to raise annual production to 60,000 boe/day

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Premier Oil PLC (LON:PMO) said its development projects in Asia are progressing well, and it expects to increase production to 60,000 barrels of oil equivalent per day by the end of the year on the back of this.

In a trading and production update, the group said its exploration programme of around 20 wells over the next 12 months is targeting around 300 million barrels of oil equivalent of unrisked prospective potential, on a P50 basis.
 
The year to date has seen continuing good production performance from the Anoa field in Indonesia, while Pakistan's production has remained steady.  This was offset by increased maintenance activity in the UK and a recent unplanned shutdown at Balmoral. Production there resumed on 4 July after a three week outage.

As a result, estimated average group production for the first half of 2011 was down at 36,600 boepd from 42,800 boepd a year earlier and forecast full year production is now estimated at between 40,000 boepd and 45,000 boepd. 

Near term developments in Asia, Chim Sao and Gajah Baru, are progressing well and 2011 year-end run rate is expected to be around 60,000 boepd as these projects ramp up. 

In Vietnam, the Chim Sao project remains on schedule with first oil expected in August.  The Gajah Baru project in Indonesia is progressing ahead of schedule. In addition, the Front End Engineering and Design has been completed for the facilities and pipelines for the Pelikan and Naga fields.  These projects are on target for sanction in the fourth quarter of 2011. 

In North Sumatra, discussions with the shortlisted facilities EPCI bidders are under way.  Technical bids are due in by September and final contract award is expected by year end. First gas on Block A Aceh remains on target for late 2013.

With the UK Huntington and Rochelle projects due on-stream next year, Premier is on target to reach a run rate of 75,000 boepd in 2012.  Premier's medium term target of 100,000 boepd remains unchanged. 

The group retains significant cash and undrawn facilities.  As at 30 June, these are estimated at US$480 million and US$800 million respectively.  At 30 June, net debt is estimated to be US$575 million.

Anticipated capital spending for the full year remains unchanged at around US$250 million for exploration and US$500 million for development, Premier added.

Quick facts: Premier Oil PLC

Price: £0.85

Market: LSE
Market Cap: £708.48 m
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