Premier Oil’s (PMO) dip in full-year earnings was relatively modest when set against market expectations. Net profits were down by 7 per cent to $234m (£141m), largely due to the closure of five wells on the North Sea Balmoral field for maintenance. Premier was forced to book a post-tax impairment of around $68m on Balmoral, while technical issues at the Huntington start-up well meant acceptable flow rates were only achieved in December.
This year the immediate priority for Premier is to find a replacement for long-serving chief executive Simon Lockett. But operational developments are also keenly anticipated. Final government sanction to drill the Catcher field in the North Sea should be delivered shortly – not a moment too soon for investors. The group is also expecting the sanction of the $5.2bn (£3.1bn) Sea Lion project in the Falklands, while the first oil from the North Sea Solan development should flow in the fourth quarter.
Ahead of Solan, there was a marginal increase in production to 0.58m barrels of oil equivalent (boe) a day, although unit operating costs were up by a fifth to $19.70 a barrel. There was positive news around exploration, with six discoveries out of seven wells drilled, adding around 40m boe to reserves.
| PREMIER OIL (PMO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 303p | MARKET VALUE: | £1.6bn | |
| TOUCH: | 303-304p | 12-MONTH HIGH: | 405p | LOW: 268p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 401¢ | NET DEBT: | 68% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.6 | 80 | 26.0 | nil |
| 2010 | 0.8 | 101 | 28.0 | nil |
| 2011 | 0.8 | 142 | 36.6 | nil |
| 2012 | 1.4 | 360 | 47.9 | 5 |
| 2013 | 1.5 | 285 | 44.2 | 5 |
| % change | +6 | -21 | -8 | - |
Ex-div: 16 Apr Payment: 21 May £1=$1.67 - *Includes intangible assets of $942m, or 178¢ a share | ||||
