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Premier Oil sees debt falling to $2.3 billion
July 13, 2018
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LONDON: Premier Oil said its debt will shrink this year by as much as $400 million and it also expects to start drilling its first well in Mexico in the fourth quarter.

The UK-based oil company has been focusing on cutting debt, which stood at $2.65 billion at the end of last month, will fall to $2.3 billion.

It also said on Thursday that its board had approved its Tolmount project in the UK North Sea and it would make a final investment decision this quarter.

“Full-year debt reduction is estimated at between $300 million and $400 million at current oil prices,” Premier said in a statement.

It expects its covenant leverage ratio, calculated as net debt plus letters of credit over earnings before interest, tax, depreciation and amortisation, to fall to three times EBITDA by the end of this year and 2.5 times EBITDA by end of March 2019, it said.

In Mexico, where Premier has mopped up much-sought after blocks, it expects regulatory approval for its appraisal programme in the third quarter before starting to drill.

Both the Mexico and Tolmount projects are crucial to the future growth of Premier’s output, which it reiterated would average 80,000-85,000 barrels of oil equivalent per day this year.

“Letters of interim agreement (for Tolmount) have been signed with the platform and pipeline contractors and the terminal for onshore gas processing selected. Premier’s Board approved the Tolmount project in June and formal sanction by partners is scheduled for the third quarter,” Premier said.


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