Premier Oil FY output falls due to Chinguetti project UPDATE

Premier Oil FY output falls due to Chinguetti project UPDATE

	Published : Thu, 25 Jan 2007 09:05 By : Agencies Print this Story

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LONDON (AFX) - Premier Oil PLC said average production for 2006 has fallen to 33,000 barrels of oil equivalent per day from 33,300 boepd in 2005 due to the disappointing performance of the Chinguetti project in Mauritania.

Output at year-end, though managing to improve to 34,400 boepd from 33,100 boepd due to contributions from Pakistan and Indonesia, still fell short of its target, the company said in a trading statement.

Despite the weak volumes, revenues will likely remain robust amid strong oil and gas prices, added Premier, which noted that it sold its oil at around 61.34 usd a barrel in 2006, up from 48.38 usd previously.

The bottom line, however, will be hit by two 'significant non-cash items,' which include the adjustment in its commodity hedges and payment in the employees asset and equity plan.

For 2007, chief executive Simon Lockett said the group is entering the year with another phase of 'high impact exploration activity and an intense phase of development planning on existing projects'.

'A programme of up to 17 wells is planned for 2007 of which seven are 'high impact', heavily weighted towards the first half of 2007,' he said.

Looking ahead, Premier assured that major projects are progressing to build output to over 50,000 boepd in the medium term.

Key projects that will drive volumes by end-2010 include Froy in Norway, Dua and Blackbird in Vietnam, Ratna in India and North Sumatra Block A and Natuna Block A in Indonesia, it said.

Apart from organic growth, acquisitions will also help build output. Deals in the last 12 months have added reserves of around 60 mln boe at a cost of less than 2 usd per barrel, the company said.

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