Premier Oil Plc (PMO), a London-based energy explorer operating from the U.K. to Southeast Asia, said production from its Huntington oilfield in the North Sea will exceed forecasts by at least 20 percent.
Three of four wells have already flowed at 10,000 barrels a day each, beating a forecast for the entire field of 25,000 barrels a day, Chief Financial Officer Tony Durrant said in an interview in London. Premier and partner EON SE will start output this month after “successful” development drilling.
The production prospects for Huntingdon mark a turnaround in its fortunes, after delays at the field and at the North Sea Rochelle deposit forced Premier to cut its 2013 output forecast in November. The Huntington partners also faced setbacks as Sevan Marine ASA (SEVAN), hired to upgrade the floating production vessel, sold the unit to avoid bankruptcy.
Premier will assess the initial performance of the wells before making a decision on any further upgrade to increase capacity, according to Chief Executive Officer Simon Lockett.
“There is chat and talk about debottlenecking,” he said in an interview, referring to a capacity expansion. “But I’d like to see these wells as they perform first.”
Premier Oil advanced by 2.4 percent to 394.2 pence in London trading, the biggest gain in a month.
Huntington also holds natural gas. Iona Energy Inc. (INA), which bought a stake in the project from Carrizo Oil & Gas Ltd., said last month the deposit will pump 27 million cubic feet of gas a day. Norwegian Energy Co. ASA is also a partner in the project.
Premier said in November it expects to pump as much as 70,000 barrels of oil equivalent a day from its fields in 2013, down from an earlier 75,000-barrel-a-day forecast. The company is now sticking to the revised target even after Endeavour International Corp. (END:US) said last month that Rochelle’s first gas production will be delayed after a storm damaged a well.
“It’s a 99 percent certainty” that partners will abandon the damaged well and will have to drill a new one, Lockett said. The effect on Premier’s planned production isn’t a concern because the company’s share of output is only 500 barrels of oil equivalent a day, he said.
Premier together with partners Cairn Energy Plc (CNE) and Wintershall AG in December approved the U.K.’s Catcher field- development plan. Teekay Corp. (TK:US) is designing a blueprint to start pumping its first oil in 2016, according to Durrant. Sevan is competing with Bluewater Holding BV and BW Offshore Ltd. (BWO) to build the producing vessel for the field, Lockett said.
“Hopefully they will be able to make a decision within this year with us,” Sevan Chief Executive Officer Carl Lieungh told investors Feb. 27. “These things have a tendency of being delayed.”
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