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UPDATE 1-Premier Oil's chief executive resigns, shares jump
February 4, 2014 / 11:16 AM / 4 years ago

UPDATE 1-Premier Oil's chief executive resigns, shares jump

(Adds share price, analysts comment)

LONDON, Feb 4 (Reuters) - The chief executive of Britain’s Premier Oil, Simon Lockett, will step down after nine years in the role, the company said on Tuesday, sending its shares up 9 percent.

The move comes at a time when the FTSE 250 oil company, with assets in the UK, Vietnam, Indonesia and Pakistan, has been stung by successive downgrades to production guidance in 2013 as well as disappointing forecasts for this year.

Premier’s share price had lost 33 percent since last May before the announcement, with some investors calling for Lockett’s resignation.

“(This) has been called for by a number of activist investors,” Sanjeev Bahl, analyst at Numis, wrote in a note to clients, adding that investors often believe a change of CEO can help re-rate the stock.

Premier currently trades at a price to earnings ratio of 7.46, well below peers at 14.75, according to Thomson Reuters data.

Lockett also attracted criticism for Premier’s management of its Sea Lion project in waters around the Falkland Islands, the operation of which it took from junior partner Rockhopper Exploration just over a year ago. The launch of production recently slipped to 2019 from late 2018.

“I think that him (Lockett) moving on allows someone else to come in and do things slightly differently because fundamentally Premier’s assets are worth more than the share price,” Nathan Piper, analyst at RBC, said.

Lockett, who joined Premier in January 1994 from Shell , will remain as CEO until a replacement has been found, and will also take part in the selection process, the company said. Lockett said in the statement he was “looking forward to pursuing new business opportunities.”

Premier struggled to hit production targets last year, twice cutting forecasts due to problems at projects in Britain’s North Sea and Vietnam. Oil production for 2014 is expected to be flat or at most grow 8 percent, due to maintenance and efficiency issues in the wake of successive downgrades last year.

During Lockett’s leadership, Premier’s share price has risen more than 140 percent, outperforming the FTSE 250 of midcap shares, while average production has jumped 56 percent, the company said. (Reporting by Stephen Eisenhammer; Editing by Mark Potter and Louise Heavens)

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