Page 15 - EurOil Week 46

EurOil INVESTMENT EurOil

Premier nearing FID on Tolmount East

UK UK producer Premier Oil is in “final negotia- at North Sea’s Catcher oilfield, the company’s
tions” with contractors ahead of taking a final biggest producer.
In less welcome news, investment decision (FID) at its Tolmount East Catcher was shut down in August but supply
Premier has slashed its project in the southern North Sea, it said on was restored to its plateau level the following
production guidance for November 12. month. However, output was then constrained
the year again. The field would complement Premier’s main in late September again after a produced water
Tolmount project, which Premier has already plant was taken offline in order to remove a
sanctioned, where it is targeting some 14bn calcium naphthenate build-up. The work took
cubic metres of gas. longer than anticipated, with the plant not
Tolmount East would “add significantly” to restarting until early November.
the southern North Sea development, Premier Another disruption happened November 9
said, helping extend its plateau production rate. when a fire broke out at electrical equipment
The company discovered Tolmount East in at the Catcher floating production storage
October 2019 and has said it aims to reach an and offloading (FPSO). The vessel’s oper-
FID by year-end. ator, BWO, hopes to restore operations by
Premier was also awarded two more licences mid-November.
adjacent to Tolmount in September. The com- Premier was anticipating producing 75,000-
pany is “in the process of maturing a number 80,000 boepd in 2020 a year ago, when market
of leads and prospects which, in the success conditions were very different. It lowered its
case, could be developed via the Tolmount forecast to 70,000-75,000 boepd in January, and
infrastructure.” then again to 65,000-70,000 boepd in May, citing
Premier also confirmed that the main Tol- an unscheduled outage at Catcher.
mount field was still on track for first gas in the Premier also decided in March to close down
second quarter of 2021. Earlier it was hoping to its mature Huntington and Kyle fields, as they
bring production on stream in the fourth quarter cannot make money at current prices. It also
of this year but delayed the launch in May, citing plans to decommission the Balmoral area in
the impact of the coronavirus (COVID-19) pan- November.
demic. Drilling is currently underway. The company’s main focus now is working
Premier operates Tolmount with a 50% stake, towards the closure of its merger with fellow UK
while its South Korean partner Dana Petroleum player Chrysaor – a deal that would establish the
also has 50%. The company had wanted to buy UK’s biggest producer, expected to happen in the
an extra 25% from Dana but axed that deal in first quarter of 2021.
July. Tolmount will flow at a rate of 40,000- Premier got creditor support for the trans-
50,000 boepd at plateau capacity. action earlier this month, as well as support for
Also in its trading update, Premier court-approved restructuring plans. It plans to
announced that a third production well at its publish a prospectus, including an independent
Solan field, West of Shetland, had been brought evaluation of Chrysaor’s reserves and a share-
on stream on September 15 and was expected to holder circular, by the end of the year.
produce at a rate of 10,000 barrels per day (bpd) “The merger with Chrysaor, which will cre-
of oil. ate a combined group with diversity, scale and
balance sheet strength, is progressing to plan,”
Cut to guidance CEO Tony Durrant said. “We now have creditor
In less welcome news to investors, Premier has approval and we expect to publish the prospec-
slashed its production guidance for 2020 yet tus in December, with completion on track for
again to 61,000-64,000 boepd, citing constraints the first quarter of 2021.” ™

Week 46 19•November•2020 www. NEWSBASE .com P15