PREMIER OIL: $2.25 B PROJECT
Premier Oil has received final government approval to press ahead with the development of the Catcher field in the North Sea – a project with a total budget of $2.25bn that is expected to boost the UK's dwindling oil output by up to 6 per cent.
A total of $1.6bn of spending will be committed ahead of the start of oil production in 2017 drawn from across three oil deposits that have each attracted small field tax allowances to incentivise development of the project.
The development will consist of 14 oil-producing subsea wells and eight further water-injecting wells designed to boost production that is expected to peak at 50,000 barrels of oil a day.
Michael Fallon, energy minister, welcomed the go-ahead for the project which is expected to support up to 1,000 jobs during its construction phase. "The project represents over £1bn of investment and almost all of the subsea expertise and equipment needed for this development is being supplied by British companies right across the country," he said.
Premier Oil acquired its initial interest in the Catcher field following its takeover of Oilexco in 2009. Oil was discovered a year later, and in 2012 Premier Oil extended its interest through the takeover of Encore in a deal that left it with a 50 per cent ownership of the field.
Further dealmaking among original backers of the Catcher field has left Cairn Energy holding a 30 per cent stake in the project with MOL, the Hungarian oil group, owning a residual 20 per cent stake.
Simon Lockett, chief executive of Premier Oil, said: "Once on-stream this project, which has been facilitated by the government's small field allowances, will underpin our growing cash flows."
The company, which also has production assets in Indonesia, Pakistan and Vietnam, has pointed to the anticipated uplift in revenues from its North Sea projects as a key component in its attempts to finance the development of the Sea Lion oil discovery off the Falkland Islands.
Premier is planning to sell down part of its interest in the Sea Lion project to a larger oil company after acquiring a majority stake from Rockhopper Exploration in 2012 for $231m.
Though Mr Lockett has led the supervision of the Catcher project through to final government sanction, he will not be in charge of field development. In February the company abruptly announced he would be stepping down this year after serving as chief executive since 2005.
In April, fellow FTSE 250 oil explorer Ophir Energy confirmed it had withdrawn a merger proposal put to Premier Oil in the wake of its announcement that Mr Lockett would be departing.
|September, 21, 11:00:00|
|September, 21, 10:55:00|
|September, 21, 10:45:00|
|September, 21, 10:40:00|
|September, 21, 10:35:00|
|September, 21, 10:30:00|
U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
ARAB NEWS - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments.
PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.