Premier CEO seeks to top oil target, get Falklands partner
LONDON (Bloomberg) -- Premier Oil Plc’s newly appointed CEO Tony Durrant has three immediate priorities to consolidate this year’s share price gain of more than 20%.
He plans to bring on stream the $1.4 billion Solan field located west of Shetland before the end of the year, find a partner to share a $5 billion investment to develop the Sea Lion project off the Falklands, and exceed an oil production target. Durrant, who was promoted to the top job on June 25 after being CFO for about nine years, also aims to double cash flow within five years to about $2 billion a year.
“We have to continue to tick the boxes on the things we’ve been doing, continue to restore credibility, keep the production up, beat the guidance,” the CEO said in his first interview. “I’ve banned the use of the words strategy review, because it’s a distraction for the vast majority of people in the organization and does create a certain amount of speculation.”
Premier yesterday, July 10, said oil and gas production rose 10% in the first half of the year, driven by the fields in the North Sea. The London-based company’s shares have risen more than 20% since the departure of the previous CEO Simon Lockett on Feb. 4 and Durrant wants to keep investors happy by beating output guidance of as much as 63,000 boed for this year.
Premier needs “to start to think about new investment, new opportunities,” Durrant said. “We’ve got our list of opportunities -- they are things within the core skills, they are things within core geographies. It’s not shuttering stuff.”
The explorer plans to possibly halve its stake to 30% in the Sea Lion discovery with at least 293 MMbbl of recoverable oil off the Falkland Islands. It plans to conduct the “detailed engineering” project designing before securing a partner in the venture, the CEO said.
“It’s a too big project for Premier to take on its own,” Durrant said. “We don’t want to become a pure Falklands company in five years’ time.”
Rockhopper Exploration Plc, Premier’s partner in the project, today said Amec Plc was awarded a contract for the front-end engineering and design of a platform for the Sea Lion field.
Premier will also continue asset sales, including a possible disposal of its stake in the Chinguetti field in Mauritania, to reach the $300 million target. It has already sold about $200 million “of non-core” assets in Norway, Indonesia and the North Sea, Durrant said.
“Premier is in a very healthy shape,” he said. “We are incredibly well financed.”