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Premier Oil - Record production could drive re-rating

April 2019

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • PMO
  • Price:
  • 76.25p
With oil prices hovering near three month highs, it was an opportune moment for North Sea oiler Premier Oil to announce that its production, having hit a record average of 80,500 barrels oil per day (boepd) in 2018, has now reached 89,500 boepd year-to-date. Even allowing for routine maintenance, declines in maturing fields and the disposal of non-core assets in Pakistan (5.2k boepd in ‘18), broker Jefferies believes unchanged guidance for 75k boepd this year is too conservative and will be upgraded as the year progresses. This, alongside free cash flow guidance of US$250-US$350m, means FY’19 net debt should fall below US$2bn from US$2.3bn in ’18 and US$2.7bn in ’17. With material liquidity of over US$400m and liv ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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