The Press and Journal (Aberdeen and Aberdeenshire)
Over 70,000 boe per day from Catcher field reported by firm
Production:
UK firm Premier Oil yesterday hailed “record” production levels from its North Sea Catcher area.
The Londonheadquartered firm said it had “frequently achieved” rates of more than 70,000 barrels of oil equivalent (boe) per day from Catcher.
Premier, as operator, owns 50% of the asset, which achieved first oil in December 2017. The other field partners are Cairn Energy, Mol Group and Dyas.
The area is served by a floating production, storage and offloading vessel, about 110 miles off the coast of Aberdeen.
Premier aims to raise the contractual oil production rate on Catcher to 66,000 boe per day from 60,000 boe in the near future.
At group level, Premier has produced 78,400 boe per day so far this year, up from 76,200 boe in the first half.
Full-year production is expected to come in at around 80,000 boe per day, the company said.
The estimate is at t h e l o w e r e n d o f Premier’s guidance of 8085,000 boe per day. As a result, Premier’s shares were down by more than 5% in early trading yesterday.
First steel will be cut for the platform for the Tolmount field, located in the southern North Sea, next month.
Project partners sanctioned the Premieroperated development in August.
The Tolmount East appraisal well will be drilled mid-2019, with first oil slated for the fourth quarter of 2020.
In the Gulf of Mexico, a first appraisal well will be drilled on the huge Zama discovery later this month. Premier has a 25% non-operated stake in Zama.
The £45 million sale of Premier’s interest in the UK North Sea Babbage area to Verus Petroleum is on course to complete before the end of 2018.
Net debt stood at £1.96 billion at the end of October, down from £2.12bn at the end of 2017.
Chief executive Tony Durrant said: “Premier is now generating significant free cash flow. Our portfolio is currently producing 85-90,000 boe per day, our low cost base has been maintained and our capital spend is tightly controlled.
“We are on track to deliver material debt reduction in 2018 through 2019, substantially improving our balance sheet.
“We look forward to the appraisal of our world class Zama discovery, starting later this month, and the commencement of construction activities for our high value Tolmount gas project in December.”
Nathan Piper, analyst at RBC Europe, said of Catcher: “The final production well of 18 was completed in October and drilling results continue to deliver better-than expected-performance.” KCA Deutag announced further losses yesterday amid a “slow recovery” and pricing levels being under pressure.
The Aberdeenheadquartered offshore drilling contractor said pre-tax losses for the nine months to September 30 came in at £90.3 million, compared with losses of £92.6m a year ago.
Offshore services business was “robust”, with revenue of £308.9m, but that was still down from £315.9m last year.
North Sea operations were stronger than the previous quarter, which KCA said reflected lower personnel and maintenance costs, as well as lower nonproductive time and improved incentive bonus achievements.
Its rig design subsidiary, RDS, reported activity continues at lower levels but it was seeing increased opportunities for new work.
Chief executive Norrie
“Aims to raise the production rate on Catcher to 66,000 boe per day”
“Losses came in at £90.3m compared to £92.6m”
McKay said: “In October, Brent oil prices reached their highest since 2014, at $85 per barrel, but have since fallen back to below $70 per barrel – showing the volatility in the market.
“In the international market, despite some increases in activity, there continues to be an excess of service company capacity causing continued pressure on pricing.
“As a result, the recovery remains slow, particularly in our land drilling business, and we do not anticipate that this will change until investment increases and utilisation levels strengthen.
“We do believe that the current investment levels will eventually drive a requirement for oil majors to increase recoverable reserves but we would anticipate that this may take some time to fully work its way through the international markets.”