Premier Oil (PMO) turned in an encouraging performance at the half-year mark, particularly as sanctions for its Catcher (North Sea) and Sea Lion (Falklands) developments are now looming into view, but the group's ability to hit its existing year-end targets is dependent on a speedy resolution of a gas-venting problem at the Huntington oilfield in the North Sea.
If all goes well, Premier expects to average 63,000 barrels of oil equivalent per day (bopd) through 2013. For the half year it averaged 58,600 bopd, broadly flat on the corresponding period in 2012. Start-up costs linked to Huntington and unplanned maintenance issues at the Balmoral wells were primarily responsible for a 9 per cent rise in operating costs to $16 (£10.25) a barrel, while Premier's realised price per barrel was down 3 per cent to $107.20. The company was also forced to book an impairment charge on assets of $77.7m against $22m in 2012, although half-year exploration expenses of $21.6m ($92.4m in 2012) was appreciably down on the first half of last year due to the success of its drilling programme. All of this combined to increase Premier's operating profit by 4 per cent to $255m, while operating cash flows were up 18 per cent to $385m.
Broker Goodbody expects 2013 EPS of 82.4¢ (from 72.9 ¢ in 2012).
| PREMIER OIL (PMO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 343p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 343p-344p | 12-MONTH HIGH: | 405p | LOW: 318p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 391¢ | NET DEBT: | 64% | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 744 | 195 | 27.8 | nil |
| 2013 | 758 | 215 | 30.5 | nil |
| % change | +2 | +10 | +10 | - |
*Includes intangible assets of $982m, or 174¢ a share £1=$1.56 | ||||
