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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 : 5340T
Premier Oil PLC
25 March 2021
Premier Oil plc (the "Company")
2020 Annual Report and Financial Statements, Sustainability Report
25 March 2021
Publication of Annual Report and Sustainability Report
Further to the release of the Company's Annual Results on 18 March 2021, the Company announces that it has today published its Annual Report and Financial Statements for the financial year ended 31 December 2020 (the "2020 Annual Report") and its 2020 Sustainability Report.
Annual General Meeting
It is anticipated that the Company's 2021 Annual General Meeting ("AGM") will be held on 23 June 2021 and, subject to completion of the merger with Chrysaor Holdings Limited, will be the Company's first AGM as Harbour Energy plc. The location of the AGM and meeting arrangements will be confirmed in the notice of meeting which is due to be published on or around 19 May 2021. The 2020 Annual Report will also be posted at that time to shareholders who have requested a copy.
Further detail regarding 2020 Annual Report
A copy of the 2020 Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism . The 2020 Annual Report is 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 2020 and their impact on the financial statements were included in the Company's 2020 Annual Results announcement on 18 March 2021. That information together with the information set out below in Appendix 1, which is extracted from the 2020 Annual Report, fulfil the requirements of DTR 6.3.5. This announcement is not a substitute for reading the full 2020 Annual Report. Page and note references in the text in Appendix 1 are made in reference to the 2020 Annual Report. To view the 2020 Annual Results announcement, visit the Company's website: www.premier-oil.com/investors
Further enquiries:
Company Secretariat:
Rachel Rickard 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?
-------------------------------------- -------------------------------------- --------------------------------------
Production and Uncertain geology, reservoir and Effective management systems in
development delivery well performance. place governing geoscience,
and decommissioning Availability of oilfield services reservoir and well engineering,
execution including FPSOs and drilling rigs, and production operations
technology and engineering activities. These include rigorous
capacity, and skilled resources. production forecasting and
Availability of transportation reporting,
infrastructure to transport produced field and well performance
oil and gas to market. monitoring and independent reserves
Adverse fiscal, regulatory, auditing.
political, economic, social, Effective management systems in
security (including cyber) and place governing project execution,
weather including contracting strategy,
conditions. cost controls, project team
Immaturity of decommissioning in the competency and functional oversight.
UK resulting in uncertain cost and Long-term development planning to
timing estimates for ensure timely and cost-effective
decommissioning of assets, including access to FPSOs, rigs and
potential acceleration of other essential services.
decommissioning due to low Preference for operatorship.
oil price environment. COVID-19 response plan and business
Travel restrictions and quarantines continuity plan.
due to COVID-19 disrupts production Specialist decommissioning team in
operations and development place coupled with continued focus
delivery. on delivering asset
Potential consequences include value to defer abandonment
reduced or deferred production, loss liabilities.
of reserves, cost overruns
and failure to fulfil contractual
commitments.
-------------------------------------- -------------------------------------- --------------------------------------
Joint venture partner alignment and Major operations and projects in the Due diligence and regular engagement
supply oil and gas industry are conducted with partners in joint ventures in
chain delivery as joint ventures. both operated and
The joint venture partners may not non-operated operations and
be aligned in either their tactical projects.
or strategic objectives Defined management system for
and this may lead to decision-making management of non-operated ventures.
inefficiency that impacts Assure contracted duty holders
significantly on operational comply with local statutory
performance of the asset. Several of requirements (e.g. UK Safety Case
our major operations are operated by Regulations 2015).
our joint venture Pursue strategic acquisition
partners and our ability to opportunities, where appropriate, to
influence is sometimes limited due gain a greater degree of
to either the scale and position influence and control.
of the operator or occasionally Due diligence of contractors,
based on our minority holdings in including diligence of financial
such ventures. solvency, anti-bribery and
Premier is heavily dependent on corruption controls, and controls to
contracts and contractors to deliver prevent facilitation of tax evasion
products and services both prior to the
to time, cost and quality criteria execution of contracts and
and to conduct its business in a throughout the term of the contract.
safe and ethical manner. Contract performance management and
In particular COVID-19 impacts have relationship management programmes
and will continue to disrupt supply are being implemented
chain capacity and for our most significant contracts
efficient execution capability to manage contractual performance
across international boundaries. and delivery, including
periodic audit of the effectiveness
of their management systems.
Longer-term development planning
alongside access to key market
intelligence sources to ensure
timely and cost-effective access to
key oilfield services capacity.
-------------------------------------- -------------------------------------- --------------------------------------
Organisational The capability of the organisation Premier has created a competitive
capability may be inadequate for Premier to reward package including bonus and
deliver its strategic long-term incentive plans
objectives. to incentivise loyalty and
The capability of the organisation performance from the existing
is a function of its structure and skilled workforce.
the deployment and strength Continue to strengthen
of its personnel. organisational capability to achieve
Premier may be unable to attract, strategic objectives. This includes
engage or retain personnel with the resource and succession planning,
right skills and competencies competency and leadership
or to deliver suitable succession development.
plans for senior roles. Continuous improvement and
The Business Management System may simplification of the Business
not be fit for purpose or Management System and related
sufficiently complied with to controls appropriate to the size and
be effective. market position of the
Company.
Continued deployment of contingent
labour through a mature
cost-effective Managed Service
Provider ('MSP') model to rapidly
respond to the peaks and troughs of
labour demand in a volatile
environment.
Staff forums providing a mutual
communication forum between staff,
management and the Board
to address employee matters.
Continued focus on diversity and
inclusion across the Group.
Embedded talent management and
succession planning process.
Complete implementation of
recommendations emerging from
externally facilitated organisation
health check conducted end 2018.
Organisational capability and risk
oversight further enhanced by global
functional review
under new operating charter.
-------------------------------------- -------------------------------------- --------------------------------------
Exploration success and reserves Premier may fail to identify and Focus on proven petroleum systems
addition capture new acreage and resource underpinned by world-class source
opportunities to provide rocks and identify technical
a portfolio of drillable exploration or political discontinuities that we
prospects and future development can exploit using our preferred
projects. evaluation workflows
Specific exploration programmes may to create a competitive advantage.
fail to add expected resource and Continuous improvement in
hence value. exploration management system with
Lender controls may reduce ability strong functional oversight.
to capture and execute the Manage exploration portfolio to
exploration programme. maintain alignment with strategic
growth and spend targets.
Maintain new ventures activity and
appropriate resourcing.
-------------------------------------- -------------------------------------- --------------------------------------
Commodity price volatility Oil and gas prices are affected by Oil and gas price hedging programmes
global supply and demand and can be to underpin our financial strength
subject to significant and protect our capacity
fluctuations. to fund future developments and
Supply factors that influence these operations.
include the pace of new oil and gas Company investment guidelines that
developments, operational ensure our investment opportunities
issues, natural disasters, adverse are robust to downside
weather, political and security price scenarios.
instability, conflicts
and actions by major oil-exporting
countries.
Demand factors that influence these
include economic conditions, climate
change regulations
and the pace of transition to a low
carbon economy.
COVID-19 reduces global oil and gas
demand and disrupts supply.
Price fluctuations can affect our
business assumptions, our ability to
deliver on our strategy
and our access to capital.
-------------------------------------- -------------------------------------- --------------------------------------
Merger completion and integration Completion Completion
Completion of the proposed merger Secure remaining necessary approvals
with Chrysaor and associated debt including creditor court
restructuring is conditional proceedings.
upon satisfying certain conditions As a contingency in case the debt
which, if not satisfied (or waived restructuring has not completed by
if applicable), may 31 May 2021, the Group's
result in failure to implement the creditors have undertaken, subject
proposed merger and debt to certain conditions being
restructuring on their current satisfied or waived, to implement
terms or possibly at all. an interim maturity extension which,
If the merger and the debt once effective, would extend the
restructuring do not proceed, the maturity date of Premier's
ability of members of the Group existing debt facilities from 31 May
to continue trading will depend on 2021 to 31 March 2022.
ongoing support from the Group's Integration
creditors. Develop, resource and manage robust
Integration transition and integration plan with
Failure to combine the Chrysaor and Chrysaor.
Premier businesses effectively in Seek to retain key employees,
order to realise planned establish clear organisation
synergies. structure and implement agile
The Group and, following completion information
of the merger, the Combined Group sharing and decision making
may be subject to unforeseen structure between parties to enable
liabilities and risks arising from effective integration planning.
the merger. Establish collaborative working
model with sensitivity to bringing
cultures together.
-------------------------------------- -------------------------------------- --------------------------------------
Access to capital Failure to complete the proposed Management of risks to merger
merger and associated debt completion.
restructuring will adversely affect Strong financial discipline through
the Group's ability to access an established finance management
sufficient funds to continue system that ensures
trading. the Company is able to maintain an
Sufficient funds may not be appropriate level of liquidity and
available to finance the business financial capacity and
and fund existing operations to manage the level of assessed risk
and planned growth projects. associated with the financial
There may be a breach of delegated instruments. The management
authority. system includes a defined delegation
The Company may be subject to of authority to reasonably protect
financial fraud. against risk of financial
fraud in the Group.
Proactive engagement with equity
markets, banks and lenders to
maintain access to capital
markets through the cycle.
An insurance programme to reduce the
potential impact of the physical
risks associated with
exploration and production
activities. This includes business
interruption cover 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.
Economics of investment decisions
are tested against downside project
scenarios.
Discretionary spend is actively
managed.
-------------------------------------- -------------------------------------- --------------------------------------
Health, safety, Significant asset integrity, process Comprehensive HSES management
environment safety or wells incident on operated systems in place including:
and security asset. - HSES auditing and reporting with a
('HSES') Significant incident arising from focus on the identification and
natural disaster, pandemic, social management of major accident
unrest or other external hazards.
cause. - Valid Safety Cases on all operated
Consequences of accidents at assets.
operated facilities may include - Robust crisis management and
injury, loss of life, environmental emergency response processes in
damage and disruption to business place and tested against.
activities. - Senior management visits to
operated facilities to
demonstrate commitment to HSES
values.
- Learning from internal and
third-party incidents.
- Insurance against business
interruption.
- Pandemic response including
regularly tested response plans, and
application of government
advice.
- Maintaining up to date business
continuity plans.
-------------------------------------- -------------------------------------- --------------------------------------
Host government: Premier operates or maintains Premier strives to be a good
political and fiscal risks interests in some countries where corporate citizen globally, and
political, economic and social seeks to forge strong and positive
transition is taking place or there relationships with governments,
are current sovereignty disputes. regulatory authorities and the
Developments in politics, communities where we do business.
security, laws and regulations can Premier engages in respectful
affect our operations and earnings. industry-wide lobbying and
Changes to the fiscal, monetary and sustainable corporate responsibility
regulatory landscape in the UK and community investment programmes.
following the UK's withdrawal Premier maintains a portfolio of
from the European Union. interests which includes operations
Consequences may include in both lower and higher
expropriation of property; risk environments.
cancellation of contract rights; Rigorous adherence to Premier's
limits Sustainability Policy and Global
on production or cost recovery; Code of Conduct.
import and export restrictions; Monitoring and adherence to local
price controls, tax increases laws and regulations.
and other retroactive tax claims; Active monitoring of the political,
and increases in regulatory burden economic and social situation in
or changes in local laws areas where we do business,
and regulations. including business continuity plans
Consequences may also include tailored to pre-defined levels of
threats to the safe operation of alert.
Company facilities.
-------------------------------------- -------------------------------------- --------------------------------------
Climate Change Adverse investor and stakeholder Premier is proactively taking steps
sentiment towards oil and gas sector to address the impact on society of
impacting investability. its operations.
Cost to comply with climate We set time-bound climate change
change-related operational objectives consistent with Paris
regulations and disclosure Agreement targets and also
requirements. demonstrate how we meet those
Longer-term disruption to Premier's objectives over time, specifically:
projects and operations as a result - Board-owned Climate Change Policy
of changing weather with strategy implementation
patterns and more frequent extreme monitored by an Executive
weather events. Climate Change Committee.
Longer-term reduction in demand for - Setting of corporate goals and
oil and gas products due to the pace annual targets within Group
of commercial deployment corporate scorecard and business
of alternative energy technologies unit KPIs.
and shifts in consumer preference - Physical and transitional climate
for lower greenhouse change risks associated with our
gas emission products. activities are identified
and actively managed.
- We are committed to ensuring that
all new projects sanctioned by us
will deliver Net Zero
emissions, through our 'Low Carbon
by Design' initiative, supplemented
where necessary by
investments to offset emissions
using carbon credits.
- Comprehensive asset-by-asset
review during 2020 identifying
projects to reduce carbon emissions
within our operations and throughout
our supply chain.
- Carbon pricing and scenario
analysis is integrated into
investment decision-making.
- Climate change performance and
supporting processes with
stakeholders are communicated in
a transparent manner.
- Dialogue with shareholders and
lenders on climate change actions.
- Collaboration with industry and
other associations on climate change
adaptation and mitigation,
including a framework by which the
industry works towards a target of
Net Zero greenhouse
gas emissions.
- Promote investability though
positive recognition
-------------------------------------- -------------------------------------- --------------------------------------
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.
2020 Progress
-- Group production of 61.4 kboepd -- Final production from certain UK fields, lower Catcher Area uptime
-- Merger with Chrysaor will result in the Combined Group becoming the largest producer in the UK
Reserves and resources (mmboe)
Objective
Premier aims to grow its reserves and resources base through a combination of successful exploration and selective acquisitions.
2020 Progress
-- Upward revisions in 2P reserves at the Catcher Area and Chim Sáo offset by negative revisions at Gajah Puteri
-- Merger with Chrysaor will materially transform Premier's reserve and resource base
Operating costs US$/boe
Objective
Premier aims to minimise costs from operations without compromising on health, safety and integrity.
2020 Progress
-- US$12/boe field opex and US$7/boe FPSO lease costs, reflecting >US$100 million of savings and deferrals
-- Cessation of production from higher cost fields
Covenant Leverage ratio
Objective
Premier aims to have sufficient headroom against its covenant leverage ratio to ensure continued covenant compliance and access to liquidity throughout the commodity price cycle.
2020 Progress
-- Reduced EBITDAX of US$626 million, due to lower commodity prices and production
-- Financial covenants waived through to merger completion; Combined Group targeting conservative financial leverage ratio through the cycle
Operating cash flow (US$ million)
Objective
Premier aims to maximise cash flow from operations to maintain financial strength, meet its debt obligations, invest in the future of the business and deliver long-term returns to shareholders.
2020 Progress
-- Reduced operating cash flow driven by lower commodity prices and production -- Merger with Chrysaor creates a Combined Group well positioned to generate material
cash flow even at low commodity prices
Net debt (US$ billion)
Objective
Premier aims to reduce the absolute level of its net debt in order to address the imbalance in its capital structure, to ensure compliance with its financial covenants and to provide the Company with future financial flexibility.
2020 Progress
-- Reduced expenditure by c.US$250 million, mitigating the impact of low commodity prices -- Merger with Chrysaor will result in a Combined Group with a strong balance sheet
ROCE %
Objective
Premier is focused on effective capital and balance sheet management, and quality of earnings through driving operational and technical efficiencies.
2020 Progress
-- Reduced earnings after tax due to lower commodity prices and production, and a number
of non-cash charges
-- Merger with Chrysaor creates a Combined Group with a broad set of high return projects -- and the ability to invest in them
Total recordable injury rate ('TRIR')
Objective
Premier is committed to managing its operations in a safe and reliable manner to prevent major accidents and to provide a high level of protection to its employees and contractors.
2020 Progress
-- Four recordable injuries across all global operations, none of which resulted in serious injury
-- Lowest recorded TRIR by Premier for over 10 years
Process safety events - IOGP Tier 1 and Tier2
Objective
Premier aims to maintain the highest standards of operational integrity to prevent any release of hazardous material from primary containment.
2020 Progress
-- No Tier 1 Process Safety Events
-- - Two Tier 2 Process Safety Events relating to a gas release on the Catcher FPSO and a methanol spill on the Balmoral production facility
GHG intensity - operated assets ( kgCO2e/boe)
Objective
Premier is committed to proactively taking steps to address the Group's impact on society and in particular to minimise the climate impact of its activities.
2020 Progress
-- GHG intensity rose slightly due to a year-on-year reduction in Group production
-- Overall CO2e gross emissions across the Group's operated assets were 820 thousand tonnes, some 12 per cent lower than that reported in 2019
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 have elected to prepare the Group and Parent Company financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006, and the Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 Reduced Disclosure Framework ('FRS 101'). 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 Group and the Company and of the profit or loss of the Group for that period.
Under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, Group financial statements are required to be prepared in accordance with International Financial Reporting Standards ('IFRSs') adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
In preparing the Parent Company financial statements, the Directors are required to:
-- select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- 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 (and in respect of the Parent Company financial statements, FRS 101) is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company financial position and financial performance;
-- in respect of the Group financial statements, state whether international accounting standards in conformity with the requirements of the Companies Act 2006 and IFRSs adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;
-- in respect of the Parent Company financial statements, state whether international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable UK Accounting Standards, including FRS 101, have 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 appropriate to presume that the Company and/ or the Group will not continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's and Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Company and the Group financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a strategic report, directors' report, directors' remuneration report and corporate governance statement that comply with that law and those regulations. 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).
Directors' responsibility statement
The Directors confirm to the best of their knowledge:
-- that the consolidated financial statements, prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and IFRSs adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Parent Company and undertakings included in the consolidation taken as a whole;
-- that the Annual Report, including the Strategic Report, includes a fair review of the development and performance of the business and the position of the Company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- that they consider the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 17 March 2021 and is signed on its behalf by:
Richard Rose
Interim Chief Executive Officer and Finance Director
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