Oil production at exploration company Premier Oil increased to 75 thousand barrels of oil equivalent per day last year as the company's Catcher field in the North Sea produced oil in December.
Despite positive production results the group fell to a loss-making position after tax of $243.8 million, down from a profit in 2016 of $122.6 million, due to impairment charges relating to the group’s refinancing.
The company also discovered a "world class" field in Mexico last year and said that cost control and strong production performance from the existing business helped the group record an operating profit of $33.8 million, up from a loss of $170.1 million the previous year, results for the year ended December 31st 2017 show.
Chief executive Tony Durrant noted the company's south east Asia assets performed well in the year with strong demand for gas from Singapore while UK production, which accounts for more than half of group production, produced strong results. The company expects its Huntington field to continue to produce longer than previously envisaged.
Net debt at the year end stood at $2.7 billion and Mr Durrant noted as the company enters 2018, its “stable production” and “lower capital commitments will generate increasing free cash flows, which in the short-term will be directed at reducing our debt”.
Capital expenditure at the group in the development and exploration category fell 58 per cent to $275.6 million while the group’s operating expenditure came in at $16.4 per barrel of oil equivalent. Both operating and capital expenditure are forecast to increase next year with the former increasing to between $17 and $18 per barrel of oil equivalent as capital spending increases to $300 million.
Earnings before interest, taxes, depreciation and amortisation increased to £589.7 million in the year.
Premier Oil is active in the UK, south east Asia, and the north Falklands basin.
