Premier expects oil output to drop

The company said it now expected 2011 full-year production of 40,000-45,000 barrels of oil equivalent per day (boepd), compared with 2010 output of 42,800 boepd.

“In the UK, production was below expectations due to maintenance related downtime earlier in the year at the Balmoral and Wytch Farm facilities, and a recent unplanned shutdown at Balmoral due to a subsea hydraulic leak,” the company said.

Estimated average group production for the first half ended June was 36,600 boepd, compared with 46,600 boepd last year.

However, Premier Oil said it saw a significant increase in production to around 60,000 boepd by year end, aided by good progress on its Asian development projects.

“Our exploration programme of around 20 wells over the next 12 months targets around 300 million barrels of oil equivalent of unrisked prospective potential.”

“Average production in 2011 is now forecast to be 40,000-45,000 boepd. This marks a second downgrade to expectations so far this year,” Canaccord Genuity said.

“While another modest downgrade to this year’s production guidance is slightly disappointing, Premier Oil’s growth story remains intact and it is our preferred stock among the larger UK-listed oil and gas exploration and production companies.”