Premier Oil's Dublin listing baffles some share analysts

BRITISH-based oil and gas exploration company, Premier Oil, begins trading on the Irish Stock Exchange today. The company, which has exploration interest in the UK, the Far East and Pakistan, is already listed in London and on the New York Stock in Dublin yesterday,

Premier Oil's chief executive, Mr Charles Jamieson, said it was attracted to the Irish market because of the recent good run in Irish stocks, and the high demand for exploration stocks among Irish investors. The number of recent rights issues in the Dublin market, he added, had endorsed the Company's views.

However, analysts in London are baffled by the move, suggesting that it may be a effort by the company to boost its share price. "It doesn't need any money. It must be a move to help the share price. Either way, it's bizarre," one analyst commented.

Premier has substantially under performed other stocks in the oil and exploration sector in London. This year, oil and exploration stocks in London have risen in value by 28 per cent on average.

Premier Oil has failed to match this performance, showing only a one per cent rise in its share price over the same period. The share traded up marginally in London yesterday to 32p, up 3/4p on the day.

Announcing the new listing in Dublin, Mr Jamieson said the inclusion of Premier Oil on the Irish market gives investors greater exposure to the international oil and gas sector. The company, he said, is hoping to attract "good long term shareholders" in the Irish market.

A number of large British institutions have shareholdings in Premier Oil. International oil and gas operator, Amerada Hess, has the biggest shareholding, with 24.96 per cent. Capital Group Companies of Los Angeles holds a 5 per cent stake and Norwich Union Life Assurance has a further 3.65 per cent stake in the company. Other shareholders include, GRE, General Accident/ Provident Mutual and Fidelity.

According to the latest figures the company has reported pre tax profits of £27.7 million in the first six months of the year, up from £14 million in the same period last year. In the past two years Premier Oil says its production levels have doubled to 30,000 barrels of oil equivalent per day.

While the bulk of its reserves are in Pakistan and in the Myanmar region in Burma, almost all of its current profits are generated in the UK, where Premier has a 12.4 per cent interest in the Wytch farm and Wareham project, operated by British Petroleum. It also has a 15 per cent interest in the Fife field, operated by Amerada Hess.

Overseas, it is involved in the drilling of 20 wells, in Albania, Cuba, Tunisia, Pakistan, and in Myanmar (Burma). This year it plans to spend between £25 million and £30 million sterling on exploration projects, according to Mr Jamieson. The group has funding in place to meet this outlay, he said.

Premier has also recently taken a 66.67 per cent stake in the Natuna Sea Block `A' in Indonesia, which has an estimated 9.7 million barrels of oil and has made a £46 million bid for a stake in oil and gas exploration project operated by the Discovery group in Australia. Analysts expect it will have to raise this bid.