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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Harbour Energy Plc | LSE:PMO | London | Ordinary Share | Ordinary Shares |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 22.40 | 22.50 | 22.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMPMO
RNS Number : 1757K
Premier Oil PLC
06 April 2018
Premier Oil plc (the "Company")
2017 Annual Report and Financial Statements
and Notice of Annual General Meeting 2018
6 April 2018
Further to the release of the Company's Annual Results on 8 March 2018, the Company announces that it has today published its Annual Report and Financial Statements for the financial year ended 31 December 2017 (the "2017 Annual Report"). In addition, the Company has today posted to shareholders the Notice of Annual General Meeting ("AGM") 2018. The AGM will be held at No.11 Cavendish Square, London, W1G 0AN, at 11.00am on Wednesday 16 May 2018.
In accordance with Listing Rule 9.6.1., copies of the 2017 Annual Report, the Notice of AGM and related form of proxy have been submitted to the UK Listing Authority and will shortly be available for inspection from the National Storage Mechanism at www.morningstar.co.uk/uk/nsm. The documents (except for the form of proxy) are also available to view on the Company's website at www.premier-oil.com
A condensed set of financial statements and information on important events that have occurred during the year ended 31 December 2017 and their impact on the financial statements were included in the Company's 2017 Annual Results announcement on 8 March 2018. That information together with the information set out below in Appendix 1, which is extracted from the 2017 Annual Report, fulfil the requirements of DTR 6.3.5. This announcement is not a substitute for reading the full 2017 Annual Report. Page and note references in the text in Appendix 1 are made in reference to the 2017 Annual Report. To view the 2017 Annual Results announcement, visit the Company website: www.premier-oil.com/investors
Further enquiries:
Company Secretariat:
Daniel Rose Tel: +44 (0)20 7730 1111
Investor Relations:
Elizabeth Brooks Tel: +44 (0)20 7730 1111
Disclaimer
This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Group believes the expectations reflected herein to be reasonable in light of the information available to it at this time, the actual outcome may be materially different owing to factors beyond the Group's control or otherwise within the Group's control but where, for example, the Group decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.
APPIX 1
Company Risk Factors (required under DTR 4.1.8)
Hot Features
Premium
Principal risk factor Risk detail How is it managed? Key Actions in
2017/18
--------------------------- ---------------------------- ---------------------------- -----------------------------
Commodity price Oil and gas prices are Oil and gas price hedging Oil hedging programme
volatility affected by global supply programmes to underpin our continued with fixed price
and demand and can be financial strength and term sales and options to
subject to significant protect our capacity provide some protection
fluctuations. to fund future developments in the event of an extended
Factors that influence and operations. period of low oil prices.
these include operational Premier's investment Economics of investment
issues, natural disasters, guidelines ensure that our decisions tested against
adverse weather, investment opportunities downside price scenarios.
climate change regulation, are robust to downside Discretionary spend actively
political and security price scenarios. managed.
instability, conflicts,
economic conditions
and actions by major
oil-exporting countries.
Price fluctuations can
affect our business
assumptions and our ability
to deliver on our strategy.
Specific risks for 2018:
inability to execute a
satisfactory oil hedging
programme due to
low forward oil prices and
market backwardation; lack
of credit lines for
hedging.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Financial discipline Sufficient funds may not be Premier maintains access to Continued engagement with
and governance available to finance the capital markets through the lenders.
business and fund existing cycle by proactive Economics of investment
and planned engagement with decisions tested against
growth projects. banks and lenders as downside project scenarios.
Breach of delegated evidenced by the completion Discretionary spend actively
authority. of its refinancing in 2017. managed.
Financial fraud. Strong financial Sales and contractor
Specific risks for 2018: discipline. Premier has an financing schemes for new
reduced flexibility to established finance growth projects.
manage the business due to management system to ensure Planned programme of
new controls agreed that it is able to maintain corporate actions.
with lenders; breach of an appropriate level of Enhancement of the design
revised banking covenants; liquidity and financial and operating effectiveness
and inability to execute capacity and to of the finance management
corporate actions manage the level of systems.
including funding assessed risk associated
development projects such with the financial
as Sea Lion. instruments.
The management system
includes a defined
delegation of authority to
reasonably protect against
risk of financial fraud in
the Group.
An insurance programme is
maintained to reduce the
potential impact of the
physical risks
associated with exploration
and production activities.
In addition, business
interruption
cover is purchased for a
proportion of the cash flow
from producing fields. Cash
balances
are invested in short-term
deposits with minimum A
credit rating banks, AAA
managed liquidity
funds and A1/P1 commercial
paper, subject to Board
approved limits.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Production and Uncertain geology, Effective management Active tracking and
development delivery reservoir and well systems governing management of any production
and decommissioning performance. geoscience, reservoir losses.
execution Availability of oilfield engineering and production Continued engagement with UK
services including FPSOs operations Government on
and drilling rigs, activities, including decommissioning.
technology and engineering rigorous production Rationalised and refined
capacity, and skilled forecasting and reporting, local operating procedures.
resources. field and well performance
Adverse fiscal, regulatory, monitoring, and independent
political, economic, reserves auditing.
social, security (including Effective project execution
cyber) and weather management systems,
conditions. including contracting
Immaturity of strategy and cost controls
decommissioning in the UK together with capable
resulting in uncertain cost project teams and
and timing estimates for functional oversight.
decommissioning of assets. Long-term development
Potential consequences planning to ensure timely
include reduced or deferred access to FPSOs, rigs and
production, loss of other essential
reserves, cost overruns services.
and failure to fulfil Preference for
contractual commitments. operatorship.
Specific risks for 2018: Specialist decommissioning
failure of new Catcher team in place coupled with
asset to fully deliver to continued focus on
expectations. delivering asset
value to defer abandonment
liabilities.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Joint venture partner Major operations and Due diligence and regular Implementation of
alignment and supply projects in the oil and gas engagement with partners in comprehensive contract
chain delivery industry are conducted as joint ventures in both performance management
joint ventures. operated and programme for major
The joint venture partners non-operated operations and contracts.
may not be aligned in their projects.
objectives and this may Pursue strategic
lead to operational acquisition opportunities,
inefficiencies and/or where appropriate to gain a
project delays. Several of greater degree of
our major operations are influence and control.
operated by our Defined management system
joint venture partners and for management of
our ability to influence is non-operated ventures.
sometimes limited due to Due diligence of supply
our small chain providers, including
interest in such ventures. diligence of financial
Premier is heavily solvency, anti-bribery
dependent on supply chain and corruption controls,
providers to deliver and controls to prevent
products and services to facilitation of tax
time, cost and quality evasion.
criteria and to conduct its Monitor contractual
business in a safe and performance and delivery.
ethical manner.
Specific risks for 2018:
access to and cost of
appropriate service
providers if oil prices
recover.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Organisational The capability of the Premier has created a Development and
capability organisation may be competitive reward package implementation of staff
inadequate for Premier to including bonus and engagement plans following
deliver its strategic long-term incentive plans the staff survey in 2017.
objectives. The capability to incentivise loyalty and Revitalised communication
of the organisation is a performance from the and understanding of the
function of both the existing skilled workforce. reward programme introduced
strength of its personnel Continue to strengthen in 2016.
and the effectiveness of organisational capability Increased focus on Diversity
its business management to achieve strategic & Inclusion across the
system. objectives. This includes Group.
Premier may be unable to resource and succession Continued phased rollout of
attract or retain personnel planning, competency and the Talent Management
with the right skills and leadership development. programme, including
competencies Continuous improvement of continued senior level
or to deliver suitable business management system succession at local and
succession plans for senior and related controls Group levels.
roles. appropriate to the
The business management size and market position of
system may be inadequate or the Company.
may not be sufficiently
complied with.
Specific risks for 2018:
unable to attract,
challenge or retain key
staff due to lack of
affordability
to pursue all the growth
opportunities within the
portfolio; increasing
competition for talent
in a potentially resurgent
market place.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Exploration Premier may fail to Focus on geologies we know Close out actions for
success and identify and capture new well and in which we can managing exploration
reserves addition acreage and resource build a competitive commitments and minimise
opportunities to provide advantage. spend or manage phasing
a portfolio of drillable Continuous improvement in relating to these
exploration prospects and exploration management commitments.
future development system with strong Rebuild exploration
projects. functional oversight. portfolio with high quality
Specific exploration Manage exploration assets.
programmes may fail to add portfolio to maintain Progress discovered resource
expected resource and hence alignment with strategic at Zama, Tolmount East and
value. growth and spend targets. Tuna via appraisal into
Lender controls may reduce reserves.
ability to capture and Continued engagement with
execute exploration lenders.
programme.
Specific risks in 2018:
inability to access quality
global opportunity set due
to lender restrictions
in a highly competitive
market.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Health, safety, Significant asset Comprehensive HSES Continuous improvement of
environment integrity, process safety management systems HSES management system and
and security or wells incident on including: the auditing of principal
('HSES') operated asset. Asset integrity and process controls.
Significant incident safety assurance with Build awareness of
arising from natural appropriate third-party identification and
disaster, pandemic, social verification and management of Major Hazards.
unrest or other external performance monitoring. Enhanced process safety and
cause. Routine HSES auditing. asset integrity monitoring.
Consequences may include Valid Safety Cases on all Senior management visits to
injury, loss of life, operated assets. operated facilities to
environmental damage and Management of change. demonstrate commitment to
disruption to business Crisis management and HSES values.
activities. emergency response
processes in place and
regularly tested.
Business interruption
insurance.
Learning from internal and
third-party incidents.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Host government: Premier operates or Premier strives to be a Close engagement with
political and fiscal risks maintains interests in some good corporate citizen Falkland Islands and UK
countries where political, globally, and seeks to governments on key aspects
economic and social forge strong and positive of Sea Lion project.
transition is taking place relationships with
or there are current governments, regulatory
sovereignty disputes. authorities and the
Developments in politics, communities where we do
security, laws and business.
regulations can affect our Premier engages in
operations and earnings. respectful industry-wide
Consequences may include lobbying and sustainable
expropriation of property; corporate responsibility
cancellation of contract and community investment
rights; limits programmes.
on production or cost Premier maintains a
recovery; import and export portfolio of interests
restrictions; price which includes operations
controls, tax increases in both lower and higher
and other retroactive tax risk environments.
claims; and increases in Rigorous adherence to
regulatory burden or Premier's Business Ethics
changes in local laws Policy and Global Code of
and regulations. Conduct.
Consequences may also Monitor and adhere to local
include threats to the safe laws and regulations.
operation of Company Active monitoring of the
facilities. political, economic and
social situation in areas
where we do business.
Business continuity plans
tailored to pre-defined
levels of alert.
--------------------------- ---------------------------- ---------------------------- -----------------------------
Key Performance Indicators (required under DTR 4.1.9)
Working interest production (kboepd)
Objective
Premier aims to maximise production from its existing asset base and, over time, to deliver production growth. Production growth is measured using average daily production and the number of development projects being brought through to sanction. The ability to commercialise and bring those projects on-stream is key to the Company's success.
2017 Progress
Average daily production in 2017 was 75.0 kboepd, in line with our market guidance and up five per cent on 2016. The increase in production on the prior year was driven by continued high operating efficiency across the Group and a full year contribution from the E.ON assets acquired in 2016. In December, our operated Catcher project was brought on-stream which will contribute materially to Group production in 2018. Premier also sanctioned the development of the Bison, Iguana, Gajah Puteri gas fields which will support our long-term contracts under which we deliver gas into Singapore. Progress was also made on our Tolmount gas project which will provide the next phase of growth beyond Catcher.
2018 Expectations
In 2018, Premier expects production from its existing producing assets to increase to 80-85 kboepd, reflecting the phased ramp up from the Catcher Area, offset by natural decline in certain of our fields and the impact of disposals.
Reserves and resources (mmboe)
Objective
Premier aims to grow its reserves and resources base through a combination of successful exploration and selective acquisitions.
2017 Progress
Proven and probable ('2P') reserves at the end of 2017 were 302 mmboe (2016: 353 mmboe). The reduction reflects the impact of 2017 production, a downward revision in reserves at Solan as a result of poorer than expected reservoir performance, and the disposal of our Wytch Farm interests. This was partially offset by upwards revisions in estimates of both Huntington and Babbage reserves as a result of extended forecast field lives facilitated by better than expected reservoir performance. Premier also added 118 mmboe of resources principally as a result of the Zama oil discovery offshore Mexico, the addition of Tolmount East as a contingent resource and upward revision to the Sea Lion Phase 2 resources including the 2015 Zebedee discovery.
2018 Expectations
Premier will look to progress and commercialise its predevelopment projects, which account for a significant proportion of its reserves and resource base, over the course of 2018. In particular, Premier expects to sanction the Tolmount gas project in the North Sea during the year which will add to our 2P reserves. Offsetting this will be production and further non-core disposals including the completion of the sale of our Pakistan business which accounted for 8 mmboe of our 2P reserves at the end of 2017.
HSES Index
Objective
Premier is committed to managing its operations in a safe, reliable and environmentally responsible manner to prevent major accidents and to provide a high level of protection to its employees, contractors and the environment. Premier measures HSES performance using a blended, weighted score covering a range of key HSES metrics.
2017 Progress
Overall performance was at or just above expectation. Both our recordable injury and high potential incident rates fell compared to 2016, and we continued to see very strong process safety performance, with only one (IOGP Tier 2) process safety event and strong process safety and asset integrity audit results from our operated assets.
Environmental performance was broadly similar to 2016 with both, greenhouse gas intensity and hydrocarbon spills to sea, showing very small reductions on the previous year.
Senior management visits to our operated facilities to demonstrate their commitment to our HSES values were supported in 2017 by Premier's first ever Global HSE Day, when coordinated visits by senior managers and other events with a HSES focus were held at all our facilities and office locations worldwide.
2018 Expectations
Premier will continue to set a base target of delivering a better HSES performance than the median HSES performance of our peers in the International Association of Oil & Gas Producers ('IOGP'), with the aim of driving continuous improvement year-on-year. In 2018, we will introduce new leading corporate metrics focused on process safety (including maintenance and integrity metrics) and routinely report performance alongside our other existing KPIs. We will also be reviewing our major HSES Management System documents to ensure their continuing relevance to our business and also their alignment with evolving international management system standards. For more information on our HSES management practices, please see page 51.
Liquidity (US$ million)
Objective
Premier seeks to have sufficient liquidity to underpin the Group's capital investment programme and to access new opportunities for future growth. The Group is committed to maintaining a disciplined approach to spending each year, where necessary, will seek farm-in partners for drilling programmes and development projects to maintain this discipline.
2017 Progress
During 2017, Premier completed a comprehensive refinancing, preserving the Group's debt facilities, resetting financial covenants and extending maturities out to 2021. This, together with a strong production performance, and continuing focus on maintaining a low operating cost base and reduced capital commitments from existing operations, enabled us to deliver our capital investment programme including first oil from our operated Catcher project.
2018 Expectations
Premier will continue to take appropriate steps in 2018 to ensure it maintains sufficient liquidity to deliver its strategic plans. We will remain focused on maximising our production while managing our operating costs and our capital expenditure. Our cash flows will be prioritised toward reducing our absolute debt levels as well as selectively investing in our new projects for future growth, while maintaining sufficient liquidity such that we are well placed to withstand another downturn in the commodity price cycle.
Operating cash flow (US$ million)
Objective
Premier aims to maximise cash flow from operations in order to maintain financial strength, ensuring we can meet our debt obligations, invest in the future of the business and deliver long-term returns to shareholders. Premier's cash flows are protected by a rolling forward hedging programme.
2017 Progress
Premier's operating cash flow for 2017 of US$496.0 million (2016: US$431.4 million) benefited from an improvement in the external macro environment which saw the oil price average US$54.2/bbl (2016: US$43.7/bbl). Premier realised an average oil price for the year post hedge of US$52.1/bbl (2016: US$52.2/bbl). The increase in operating cash flow was helped by a strong production performance and tight cost control.
2018 Expectations
Future production growth together with Premier's low cost base, will underpin 2018 operating cash flow. In particular, production from the new Catcher Area will contribute materially to the Group's operating cash flow as it ramps up during the first half of 2018. Premier will continue to look to hedge to protect its future cash flows and our investment programme. We have hedged approximately 50 per cent of 2018 oil production with an average floor price of US$58/bbl and 27 per cent of our UK gas production at 47 pence/therm.
Operating costs (US$/boe)
Objective
Premier aims to minimise costs from operations without compromising on health, safety or asset integrity. Operating costs per barrel of oil equivalent is a function of industry costs, inflation, the efficiency and effectiveness of Premier's people, technology, and production output. Operating costs are monitored closely to ensure that they are maintained within pre-set annual targets.
2017 Progress
Operating costs remained low at US$16.4/boe in 2017 (2016: US$15.8/boe), in line with our budget but a small increase on 2016 due to portfolio mix effects in the production base. The low cost base continues to be driven by high operating efficiencies across our producing portfolio, and ongoing cost savings across the business. It reflects the significant cost reductions that have been achieved over the last two years.
2018 Expectations
Premier expects operating costs in 2018 to be between US$17-18/boe, and to maintain a low cost base for the medium-term, underpinned by continued focus on maximising operating efficiencies, from collaboration initiatives and competitive re-tendering.
Net debt (US$ billion)
Objective
Premier aims to reduce the absolute levels of its net debt in order to address the imbalance in our capital structure, to ensure compliance with its financial covenants and to provide the Company with future financial flexibility. Premier anticipates reducing its net debt by using cash flow generated from its producing assets and disposals, while maintaining tight cost control.
2017 Progress
Net debt at year-end was US$2.7 billion. Positive free cash flow generation including disposals, was offset by adjustments to reflect the terms and the costs of the refinancing and non-cash foreign exchange movements on non-dollar denominated debt.
2018 Expectations
Premier is targeting further debt reduction during 2018. With forecast low operating costs, reducing capital expenditure, and increasing production from our UK tax advantaged assets as Catcher production ramps up, Premier is well placed to deliver on this target. Post year-end, Premier invited its convertible bondholders to accelerate the conversion of their bonds, which further reduced the net debt.
Directors' responsibility statements (required under DTR 4.1.12)
The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations.
Group financial statements
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union ('EU') and Article 4 of the International Accounting Standards ('IAS') Regulation and have also chosen to prepare the Parent Company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing the parent company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether Financial Reporting Standard 101 Reduced Disclosure Framework has been followed, subject to any material departures disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 - 'Presentation of Financial Statements' - requires that Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
-- make an assessment of the Company's and Group's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website (www.premier-oil.com). Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' responsibility statement
We confirm to the best of our knowledge:
1. the Group financial statements, prepared in accordance with International Financial Reporting Standards, as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
2. the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
3. the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 7 March 2018 and is signed on its behalf by:
Tony Durrant
Chief Executive Officer
Richard Rose
Finance Director
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSUGURWCUPRGAQ
(END) Dow Jones Newswires
April 06, 2018 11:45 ET (15:45 GMT)
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