Premier Oil has completed the Babbage Area sale

12/7/2018
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In July 2015, Premier successfully entered Mexico with the award of Blocks 2 and 7 in Mexico's Round 1 license round. The blocks are located in the shallow water Sureste Basin in the Gulf of Mexico. Map: Premier Oil.

LONDON -- Premier has completed the sale of its interests in the Babbage Area to Verus Petroleum SNS Ltd.  

Premier has received $38.7 million (£30.3 million), after adjustments for Babbage cash flows collected by Premier since the effective date of Jan. 1, 2018.  In addition, Verus will take on exploration commitments valued at c.$24 million.  Production from Babbage has averaged 2.5 Mboepd year to date.

The sale proceeds will be used to pay down the Company's existing debt.

Production update
Group production year to date has averaged 79.4 Mboepd. Production in November and December to date was above forecast at 92 Mboepd with a record daily production rate of 98.7 Mboepd achieved on Dec. 4, 2018.  This strong production performance has been driven by high uptime across the Group's producing portfolio, including at Premier's operated Catcher Area which has averaged 68 Mboepd (gross, Premier 50%) in November and December to date.

Premier continues to forecast full year production of around 80 Mboepd.

Premier has hedged over 30% of its 2019 forecast oil entitlement production at an average price of $70/bbl, as per previous disclosure.

Mexico update
On Nov. 29, 2018, the Ensco-8503 rig spudded the Zama-2 appraisal well, the first of the two well Block 7 Zama appraisal program.  The well will aim to confirm the oil water contact and is expected to reach the reservoir early in the New Year.

Sierra Oil & Gas, Premier's 40% partner in the Block 7 Zama discovery, announced on Dec. 4, 2018 that it is to be acquired by DEA Deutsche Erdoel AG (DEA).  DEA is also the operator and Premier's 40% partner in Block 30, which contains the high impact Wahoo and Cabrilla prospects, with 3D seismic acquisition planned for 2019.

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