(Reuters) - Premier Oil expects its $2.8 billion debt pile to start falling, with its flagship Catcher oilfield in the North Sea set to begin production on time in December, it said on Thursday.
The company also cut its 2017 capital expenditure plan for the third time, and said debt reduction would accelerate through 2018 as its investment commitments fall.
The start-up of Catcher is key to increasing Premier’s revenue to pay down net debt, which rose to $2.8 billion at the end of September from $2.7 billion at the end of June. Premier’s equity market value is 367 million pounds ($483 million)
“As long as we’re outperforming operationally, I‘m happy, everybody’s happy, the banks are happy,” Chief Executive Tony Durrant told Reuters.
Premier also said it expected to be cash flow positive in the fourth quarter and for the whole of 2017, with higher production and oil prices offsetting spending at Catcher.
The London-listed company cut its development, exploration and abandonment expenditure for 2017 to $300-$310 million. It had originally planned to spend $390 million before cutting to $350 million in May and again to $325 million in July.
Premier also maintained its full-year production guidance at 75,000-80,000 barrels of oil equivalent per day (boepd) and its operating costs forecast of about $16 per barrel.
Its production has averaged 76,600 boepd so far this year, up 11 percent on the same period last year, it said.
At 0820 GMT, Premier shares were down 1.8 percent at 68.33 pence.
(The story is refiled to make clear in paragraph 4 the CEO was speaking to Reuters.)
Reporting by Arathy S Nair in Bengaluru; Editing by Mark Potter