Premier Oil seeks to raise an extra $300m

Premier Oil is seeking to raise an additional $300 million (€251m) as part of a proposed long-term refinancing of the business ahead of its acquisition of BP assets.

The company made the announcement as it published its results for the six months to June 30th.

Premier Oil swung to a loss of $672 million after tax, driven by one-off non-cash charges of $639 million. Without the one-off charges the loss was $32 million. That compared to a profit after tax of $121 million in the first half of 2019.

In the first half of the year operating cash flow was $324 million, down from $545 million a year earlier. Free cash flow was $25 million, down from $188 million in the first half of 2019, and net debt was down to $1.97 billion, from $1.99 billion.

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Production for the six months was 67.3 kboepd, down from 84.1 kboepd in the first half of 2019. The Solan P3 is due on-stream in September, which is forecast to add around 10 kbopd in the fourth quarter to group production rates. Unsanctioned growth projects have been put on hold.

"We have taken decisive action to safeguard our people and our assets," chief executive Tony Durrant said.

“We have reduced our expenditure which, together with our hedging programme and the continued underlying performance of our assets, resulted in us generating free cash flow for the period despite the collapse in commodity prices.

“The BP acquisitions and our proposed long-term refinancing will position Premier to benefit from materially rising near-term production, additional free cash flow generation and a strengthening balance sheet, against a backdrop of a recovering oil price.”