October 23, 2013 / 9:04 AM / 4 years ago

UPDATE 1-Premier Oil shares drop after output guidance cut

* Expects to produce 57,000-59,000 boepd in 2013

* Previous forecast 63,000 boepd made in July

* Co says plans in place to address issues

* Shares down 2.6 pct, hit lowest in 10 months (Adds background, analyst comment, share price)

By Sarah Young

LONDON, Oct 23 (Reuters) - Britain’s Premier Oil Plc cut its output guidance for the year by up to 10 percent, its second downgrade in four months, blaming pipeline issues at projects off the coast of the UK and Vietnam.

Shares in the company tumbled as low as 315 pence, their lowest level in around 10 months, and were down 2.6 percent at 331.3p by 0853 GMT.

Premier, which has a stock market value of around 1.8 billion pounds ($2.9 billion), said on Wednesday it now expected to produce between 57,000 and 59,000 barrels of oil equivalent per day (boepd) in 2013, against the 63,000 it had forecast in July.

Premier had earlier on in the year given guidance for output to be in the range of 65,000 to 70,000 boepd.

“The company is developing a bit of a reputation for missing targets and if history is a guide to future performance further bumps in the road should be expected,” analysts at brokerage Mirabaud said.

The production downgrade follows a succession of forecast cuts and production misses over the last two years. In 2012, for example, it cut its forecast to 60,000 boepd from between 60,000 and 65,000, and then produced just 57,700.

“While our oil production is currently restricted by gas export issues in both Vietnam and the UK, this has limited impact on the long term value of those fields. Plans are in place to address these issues,” Chief Executive Simon Lockett said.

In Britain’s North Sea, Premier said problems with the CATS gas export pipeline, operated by BP, were expected to be gradually resolved from early November.

Damage to a pipeline in Vietnam caused by a fishing boat anchor interrupted gas exports there. A restart is expected in November.

The company, which also produces oil and gas in Pakistan and Indonesia, said work on plans for new projects off the coast of Britain, Norway and the Falkland Islands were progressing towards key investment decision dates.

Analysts at brokerage Bernstein said the fact that there was no change to production forecasts beyond 2013 meant they would maintain their “outperform” rating on the stock, calling the company’s pipeline of projects “attractive”. ($1 = 0.6168 British pounds) (Editing by Kate Holton and David Holmes)

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