Jam tomorrow for Premier shareholders

New production from fields in Vietnam and Indonesia helped to boost Premier's working interest to 58,400 barrels of oil equivalent per day (boepd) from 36,900 boepd a year earlier. Premier also cited improved production levels from existing fields in the North Sea, Pakistan and Indonesia as contributory factors. Allied to the step-up in output, Premier profited from strong comparative realised oil prices, which were up by a third on a post-hedging basis to $106 (£67) a barrel. Costs were also contained as a 5 per cent rise in underlying operating costs (to $14.70 a barrel) represented a creditable outcome compared with industry peers.

These factors helped increase operating profits to a record $245m (£155m), up from $42m a year earlier, while boosting operating cash flow by a third to $325m. Although Premier's net profit of $145m was in line with market expectations, it included a tax charge of $48.8m against a tax credit of $56m in 2011.

Since the June half-year-end, Premier has purchased 60 per cent of Rockhopper's interests in the Falkland Islands for $231m, with another $770m earmarked if plans to develop the oil prospects are advanced, which could conceivably add to Premier's net prospective resource of 2.7bn boe.

Exploration activities are now focused on prospects in the UK North Sea and Norway. Premier expects full-year production to average around 60,000 boepd, a 49 per cent rise year on year, although an exit rate of 75,000 boepd is conceivable if the Huntington and Rochelle fields come on stream. This figure is expected to eventually rise to 100,000 boepd once the North Sea Catcher prospect comes to fruition.

Investec expects 2012 EPS of 59.2¢ (31.5¢ in 2011), rising to 91.4¢ in 2013.