January 10, 2019 / 7:11 AM / a year ago

Premier Oil cuts more debt than forecast

LONDON (Reuters) - Britain’s Premier Oil (PMO.L) cut debt to $2.3 billion at the end of 2018, below a previous forecast of $2.4 billion, it said in a trading update on Thursday.

Premier’s full-year production of 80,500 barrels of oil equivalent per day (boepd) came in slightly above its guidance and was up 7 percent from its 2017 output.

For this year, Premier, which has been selling producing assets, sees output at around 75,000 boepd.

Premier estimates its revenue for last year at $1.4 billion, more than a quarter higher than in 2017 on the back of higher production as well as higher prices.

Premier has been hedging large chunks of its production, including around 36 percent at an average of $70 a barrel through the year. Oil prices LCOc1 are currently around $60 a barrel.

“On a full year basis, Premier expects to generate positive free cash flow at oil prices above $45 (a barrel) during 2019,” Premier said.

It sees operating costs to rise to around $20 a barrel from $16.90 in 2018, reflecting the sale of low-cost gas producing fields.

Premier, whose bottom line still profits from tax loss allowances, is set to spend around $290 million on development and exploration, including its wells in Mexico’s Zama field.

Additional reporting by Arathy S Nair; editing by David Goodman and Jason Neely

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