LONDON (ShareCast) - (Sharecast News) - Upstream oil and gas firm Premier Oil cut guidance for its full-year operating costs to $12 per barrel of oil equivalent from the previously expected $13.
Premier Oil, which now expects debt reduction to reach the upper end of its $250-$350m target by the end of 2019, saw first-half production increase 11% to an average of 84,100 barrels of oil per day, putting it on track to meet its previously increased full-year production guidance of 75,000-80,000 barrels of oil equivalent per day.

Net debt reduced from $2.33bn at the end of 2018 to $2.15bn at the end of June 2019 as a result of free cash flow generation of $180m in the half.

The FTSE 250 company expects to give the final go-ahead for two satellite fields at its flagship North Sea oilfield Catcher in August, extending the project's ability to produce at 66,000 boe per day.

Premier also expects to shortly submit applications for senior debt facilities for its Sea Lion project off the Falklands.

Chief executive Tony Durrant said: "We have delivered a strong first half. I am particularly pleased with the continued high operating efficiency from our producing portfolio which has enabled us to reduce our debt by $180m.

"In addition, we have retained significant optionality with our future developments and an extremely attractive exploration portfolio which together offer substantial upside exposure."

City Index analyst Fiona Cincotta said: "Premier Oil is doing all the right things to cut the size of its debt pile to a more manageable level.

"The company has some mouthwatering offshore prospects to develop in the North Sea, Mexico and the Falklands, making it one of the more exciting companies to watch in the UK."

However, Cincotta did add that at $2.15bn, the group's debt pile remained "cumbersome" and noted that oil prices were still "volatile".

At 0815 BST, Premier shares were down 3.33% to 78.26p.

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