Share Name Share Symbol Market Type Share ISIN Share Description
Premier Oil Plc LSE:PMO London Ordinary Share GB00B43G0577 ORD 12.5P
  Price Change % Change Share Price Shares Traded Last Trade
  1.36 1.56% 88.36 47,758 08:11:25
Bid Price Offer Price High Price Low Price Open Price
87.92 88.56 88.36 87.30 87.30
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 1,095.86 124.05 13.57 6.7 735
Last Trade Time Trade Type Trade Size Trade Price Currency
08:11:25 AT 1,145 88.36 GBX

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Date Time Title Posts
12/12/201907:59Premier - Charts and All47,191
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12/7/201911:59pmo by end of 20191
07/5/201916:55Premier Oil -821

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Premier Oil Daily Update: Premier Oil Plc is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker PMO. The last closing price for Premier Oil was 87p.
Premier Oil Plc has a 4 week average price of 83.62p and a 12 week average price of 70.88p.
The 1 year high share price is 110.20p while the 1 year low share price is currently 54.70p.
There are currently 831,517,099 shares in issue and the average daily traded volume is 8,677,745 shares. The market capitalisation of Premier Oil Plc is £723,419,876.13.
whiskeyinthejar: The problem for Tullow with any of the usual ways of comparing oil companies is that enterprise value is used, so despite TLW share price falling, TLW still looks expensive compared to peers. I calculate TLW enterprise value as $3.6b ($848m market cap +net debt). PMO still has a lower enterprise value of $3.0b. So TLW is up for sale. But on face of it, I'd rather buy PMO for $3.0b than buy TLW for $3.6b because PMO is generating more than twice as much free cash. Similar story with reserves. TLW has much higher enterprise value than PMO, but similar reserves(2P, 2P+2C). So PMO still cheaper on reserves too. On outlook, Tullow board say (RNS), group production for 2020, AND following 3 years won't increase. That's 4 years, no increase. On NAV, Premier seems set to substantially upgrade reserves at Catcher, Tullow shareholders face a downgrade which will hit TLW share price again I think.
rationaleee: As andypop suggested we had a similar HF during the last refinancing who was a convertible bond holder who I believe had a much better claim as they were entitled to equity payment as debt payment. This other Hf now is holding debt that they are hedging as opposed to convert which had an inherent equity option. This new hedge fund will have to sell the debt in the secondary market (from where they bought the debt) I suppose if they don’t want to extend maturity (can someone confirm this ?) . They can’t force a company to payback if the company wants to extend the maturity and terms and maybe throw in a few sweetners (warrants?) . These creditors would have to start looking out for selling their debt in the secondary market if they don’t want to hold it post 2021(remember the news articles on Llyods trying to sell the debt in 2017?) These creditors and hedgies need to decide fast as oil is going to go up a lot faster to $70+ levels as the new oil minister said aramco will be above $2T in the next few months after float. Imagine the crown prince of KSA watching the share price of their most prized asset I.e. Aramco daily on a minute by minute basis. Share price of such a big oil company has to go up or at the least should not go down. The only way to ensure that is to drive the main variable that drives the oil company’s share price - oil price .
whiskeyinthejar: Lee- I wasn't saying gas was as valuable as oil. I said brokers say Big P is worth 3-4p per share. That's rather small compared to Catcher etc. But it's not negligible. In Permian,gas is already pretty worthless. Aging shale wells have already killed the gas price. They will pay you to take the gas off their hands. Negative prices. They are flaring more gas in Texas than many countries use. But that's not the same as Asia where there is a decent market for gas. Tolmount East was worth 8p per share, and it was priced in beforehand (risked) so the result was only worth about 2p. Was never going to move price. Gas and oil in the ground isn't so valuable, but Tolmount is actually rather material once we extract the gas. As PMO say, in Brookes' June presentation, it will pay back within a year, that's over $120m in a year and they say it will contribute over a billion dollars to coffers in lifetime of field. These numbers are at 60p/ therm. We are currently hedged in North Sea at 64p/ therm so that billion dollars is realistic. The date that Tolmount starts up is also therefore material. As far as oil is concerned, people I think are overlooking Catcher. Catcher is outperforming and is set for an upgrade at year end. This is flagged in new November presentation. Sanctioned reserves are based on a 30% recovery factor. But this very low for North Sea. One way of looking at it is if the recovery factor is doubled to 60%, it's like Premier adding a second Catcher field. However, 50% is figure Elizabeth Brookes mentions. But still a big deal. The share price sits where it does because that's what the market guesses is how much is left for shareholders after debt is paid off. Based on current valuation of assets if sold off. So Sea Lion etc sold off before development. Catcher barrels sold at $23 per boe (that's $1.1bn for 48 mmboe). Add on other production ( $0.9b) and add on tax losses, but set against this is $2bn debt and other costs and basically it all cancels out. This is core NAV and it's slightly negative (-$28m or -3p per share) at $70 brent. However, we have assets for appraisal and development. So Total risked core NAV is 140p ($70 Brent) or about 80p if Brent is at $60. This is why share price is where it is. And this is why share price is leveraged to poo. Someone was saying PMO is leveraged to poo because it has 'high beta' , but this is meaningless. It's like saying there's big waves on beach because they have high amplitude. It's not a reason. It's about valuation, how the market values oil companies (forget PE it ignores debt), how much cash the business generates at varying poo and the proportion on non -producing assets PMO has. We are leveraged because the value for shareholders (risked NAV) approximately doubles if poo goes from $60 to $70 and triples if it goes to $75. They can only do the reserves upgrade annually. There will be other additions, probably including another small add from Big-P. But Catcher upgrade alone should be transformational to the valuation of PMO, confidence in its ability to repay debt and mean refinancing debt next year is on better terms.
whiskeyinthejar: Why are so many investors betting against Premier Oil? More than a fifth of the explorer’s 831m shares are out on loan, according to data provider IHS Markit, making it the most “shorted”; stock in the FTSE 250 index. But things aren’t quite as bad as they might appear. Almost three-quarters of those positions are banks borrowing stock to hedge their exposure to Premier Oil. The reason they need to protect themselves is they have sold investors contracts for difference (CFD), financial instruments that allow speculators to bet on the direction of a company’s share price without actually owning any stock. Premier Oil has become a quasi-casino because its shares are highly correlated with the price of oil, often moving more dramatically than the underlying commodity itself. Even putting that dynamic to one side, there’s still a group of hedge funds against the company — probably because of its $2bn (£1.5bn) net debt, accrued after it invested heavily as the price of oil cratered last year. Premier Oil has £193.7m of borrowings maturing in May 2021. Ahead of what could be a tricky refinancing, the company, led by long-serving Tony Durrant, is planning to reduce its net debt by more than $300m this year. Durrant has also put Premier’s roughly 15% share of the Gulf of Mexico’s Zama discovery on the block, which analysts at Investec value at $405m — roughly 45% of the £742m market cap. Last month Premier gave a bullish update on its performance, boosted by a strong contribution from its North Sea Catcher field, which is boosting cashflow. The company expects total production for the full year to be at the upper end of its forecast of between 75,000 and 80,000 barrels a day. The share price —up by a quarter since the start of the year to 86.9p — could get another jolt if Opec alters its production targets at its meeting in Vienna this week. Economists at Jefferies expect oversupply to depress oil prices in the first half of next year, with stabilisation in the latter part of the year. Geopolitical tensions add another layer of uncertainty for Premier, as demonstrated when Yemeni rebels launched a drone attack on Saudi Arabia’s Abqaiq refinery in September, disrupting production. If Premier can offload its stake in Zama at a decent price, it will ease concerns around its refinancing and spur some short sellers to cover their positions, boosting the stock. But for now this remains a heavily indebted company that is at the mercy of the price of oil. Avoid.
master rsi: Not easy but managed to get the report without registering ........... PMO - Premier Oil Is Cheap, But Upside Is Doubtful Aug. 27, 2019 6:10 PM - Vasily Zyryanov In 1H19, Premier Oil improved both the P&L and cash flow statements; FCF soared on the back of higher production and lower costs of operations. The company initiated a sales process of its stake in the Zama field offshore Mexico to repay debt. Due to the uncertainty over the global recession and weak revenue growth in the 2020s, I rate the stock as "Hold." Premier Oil (OTCPK:PMOIF, OTCPK:PMOIY), the London Stock Exchange-listed exploration & production company, currently trades at only ~0.7x P/B and ~3x EV/EBITDA. This level may seem attractive for value investors who seek underappreciated companies with a decent strategy, reasonable governance, and a possible turnaround in the short term. One of the culprits of low trading multiples is April-August 2019 sell-off. For broader context, since August 2018, the FTSE 250 constituent's market capitalization plummeted from ~$1 billion to ~$621 million. The primary downside catalyst was Brent price volatility, which arose from the global demand concerns stemming from a trade war. The oil price was also the essential catalyst of Premier's recuperation in the first half of 2019 when its share price had soared ~57.5% from January until late-April. In a few cases, cheap valuation stems from deep, cardinal issues that are not noticeable upon cursory inspection. In the article, I intend to examine the available financial information and conclude if bargain-level ratios are fully justified or imperfect valuation arises from temporary inefficiency and emotional bearishness of the market and will be eliminated soon, thus creating a lucrative investment opportunity. Now let's take a more thorough look at the company. The top line Incorporated in Scotland, Premier Oil generates the bulk of revenue (and EBIT) in the United Kingdom (the Catcher Area, Huntington, the Solan field, etc.) Blocks offshore Vietnam (the Chim Sáo and Dua fields) and Indonesia (e.g., Natuna Sea Block A) also contribute to the top line, but to a lesser extent. The total production in 1H19 added up to record 84.1 kboepd (10% higher than in 1H18); 41% came from its flagship asset, the Catcher Area offshore Great Britain. The Catcher performs prodigiously; the company even anticipates to increase its reserves in end-2019 due to strong subsurface performance (see p. 2 of the release). The most recent half-year results presented on August 22 contained a few improvements worth meriting. All the essential metrics like revenue, EBITDAX (a 39% increase compared to 1H18), EPS (a 23.4% increase), and FCF (defined by the company, see glossary on p. 48) were far better than in 1H18; net operating cash flow more than doubled. These results were achieved on the back of higher production and high operational discipline. Speaking about growth prospects, I should mention that Premier currently develops the Tolmount gas field in the Greater Tolmount Area, on schedule and below budget. First gas from the field will support 4Q20 and FY21 revenue and operating cash flow. Also, first gas from Bison, Iguana, and Gajah-Puteri (BIG-P) fields offshore Indonesia will bolster the top line in 1Q20. Deleveraging is vital One of Premier's key drawbacks is that it is saddled with a total debt of $2,386 million, which translates into a Debt/Equity ratio of 2.15x. At the same time, Net debt/EBITDA (I used LTM EBITDA figure provided by Seeking Alpha Essential) stands at 2.16x, which is not ideal but also not terrifying. Apart from that, due to the increasing amount of borrowings, interest expense (on an accrued basis) soared in 2016 compared to 2015 and, since then, has been continuously growing, hammering the bottom line. As my esteemed readers likely know, it is not just tough and challenging, but nearly impossible to create shareholder value and prop up Market Value Added when the balance sheet is burdened by immense debt. Yet, Mr. Market does not always reprimand stocks that have humongous debt. Here I should remind that Swedish E&P company Lundin Petroleum (OTCPK:LUPEY) even has negative net worth due to cyclopean amount of borrowings on the balance sheet; yet, investors, mesmerized by revenue growth prospects secured by the Johan Sverdrup oilfield and calmed by safe Net debt/EBITDA ratio (interest expense is minuscule, by the way), are ready to even pay a premium for the share. Premier Oil picked a method that energy companies across the globe actively used to ameliorate their capital structures and enhance returns during the oil market meltdown. It decided to divest the stake in the prolific Zama field (810 mmboe in gross resources) offshore Mexico and fully exit the project while retaining a stake in the adjacent Block 30. As the firm trims its exposure to the project, it becomes apparent that growth is not its priority at the moment. It has both pros and cons. Let me briefly clarify this. If an oil company scales down exploration activities or divests stakes in prolific oil fields that are currently under development, it can receive substantial cash proceeds and reduce the value of long-term assets on the balance sheet, thus boosting returns and reducing future capital investments. At the same time, if because of divestments future production will be too tepid, lower revenue will put pressure on margins jeopardizing EPS, FCFPS, FROIC, and Market Value Added. So, I hope Premier has carefully pondered all the pros and cons. If debt reduction pans out, the market appreciation might follow. Lower interest expense, in turn, will ease pressure on the bottom line. But to regain investor credit, the firm should also proactively manage opex to be able to consistently increase EPS despite soft revenue caused by weaker Brent. Free cash flow According to IAS 7 Statement of Cash Flows, interest paid may be classified as operating, investing, or financing cash flows. In this regard, I recommend taking a more in-depth look at the IFRS EU cash flow statements when computing levered FCF (FCF to Equity) because if we simply deduct capex (e.g., additions to PP&E or oil & gas properties) from net CFFO, we overlook an essential point, especially in the cases of overleveraged companies: interest that was not accrued but actually paid during the period. GAAP requires to classify interest paid only as a component of operating activities; thus, investors who are focused on the US stock market should bear in mind that non-US companies quite often report interest in the financing section of the CFS. So, Premier Oil reported 1H19 FCF of $182 million. This non-IFRS measure was defined by the company as Positive cash flow generation from operating, investing and financing activities excluding drawdowns from and repayments of borrowing facilities. I estimate half-year after-interest FCF to equal $313.8 million (net CFFO minus capital expenditure and interest paid; see the condensed CFS on p. 27 to find these items). Adjusted for decommissioning and lease liability payments, FCF equaled to $186.2 million. This is far better than in 1H18 when FCF (net CFFO after capex and interest paid) was negative $65.2 million. So, Premier did a great job not only boosting accounting profit but also improving cash flows. Dividend The dividend was eliminated in 2015 when Premier had to grapple with oil market headwinds. DPS cut or elimination is always a bitter pill to swallow, but sometimes shareholder rewards not supported by FCF (especially when Debt/Equity ratio approaches unhealthy level) could easily push a company on the brink of insolvency. As Premier's debt burden is still significant, I see that dividend introduction is unlikely in the short term. A quick valuation I suppose it is worth applying EV/EBITDA and EV/Production ratios to compare Premier with its closest peers: Cairn Energy (OTCPK:CRNCY) and EnQuest (OTCPK:ENQUF). Cairn and EnQuest have not presented their 1H19 results yet, so, I used 2018 data. Cairn Energy trades at EV/EBITDA of 7.4x and EV/Production of 67.6x (considering 1.2266 exchange rate to convert GBP to USD). At the same time, EnQuest trades at 2.7x EV/EBITDA and 39x EV/Production. Premier's debt and equity investors are ready to pay $3 per dollar of EBITDA and $35.6 per barrel of oil equivalent. In sum, Cairn looks overvalued as its operating results were distorted by impairment; however, production figures were also not stellar. Both Premier and EnQuest are undervalued, and the main culprit is leverage. Bargain-level valuation is surely not fully justified, as the company's performance is improving. Yet, I reckon in the short term Brent price will not be supportive of the expansion of multiples, as the trade war escalation takes a toll on traders' sentiment. Final thoughts Canny investors who are constantly seeking value stocks with decent prospects may consider Premier Oil as a top pick. However, I suppose they should take into account the anticipated revenue decline in 2020-2022 and tepid EPS growth despite the Tolmount gas field on stream in 2020. At the same time, it is worth noting that Premier could increase 2019 revenue ~13.3% compared to FY18. However, the company pays no dividend and operates in a cyclical industry; hence, it is not apt for a recession-proof portfolio. According to Seeking Alpha Essential, the sell-side analysts are currently pronouncedly bullish. Their sentiment is likely inspired by Premier's merits as high operating efficiency in the Catcher Area and possible reserves increase, more resilient FCF and improved ESG score (e.g., due to minimized emissions at the Tolmount and Solan). Nevertheless, speaking about the market sentiment, I should remind that the Fear & Greed Index provided by CNN Money as one of the key indicators of the current sentiment in the US shows Extreme Fear. Investors are concerned with the repercussions of the trade war, while it is entirely uncertain if new rate cuts will be enough to stave off a global recession. All in all, Premier Oil is a "Hold." However, I do acknowledge that if a trade war is temporarily settled (before likely reignited again, as we have already seen this year) and news headlines serve as catalysts of greed on the stock market, oil stocks will rally. Among the key short-term catalysts may also be the results of the Tolmount East appraisal well and new investor interest to the Sea Lion project offshore the Falkland Islands. Deleveraging also remains vital. Note: Because of unsatisfying liquidity, ADRs do not fully reflect the ordinary share price movement on the LSE. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
montevid: GS still manipulating the PMO share price with the other shorters. At $71 per barrel the PMO price should be clearly higher.
whiskeyinthejar: Marvin went on about all this before last trading update, and one before. The story goes that because share price isnt doing what we want, then shorters must be fraudulently being fed inside information by pmo. Have to say it doesn't follow. So what was this negative information in the last trading update, or prior one that insiders knew about before and retail didn't? Was it that debt targets are being met? Or was it that Catcher was over performing? I can't see that there has been anything that insiders could've been fed that was any use to them. Genel has a similar chart to PMO. It has similar risk on/off behavior too. It's share price also halved from last year's high to a low at end of December. Since then its share price has recovered, but has got stuck under £2 in same way pmo is has met resistance at 80p. Are Genel shareholders speculating they have insider traders controlling their share price? Ironically a former Genel director was done for insider trading, but i haven't seen any speculation on advfn that Genel CEO is engaging is criminal activity. Perhaps because Marvin doesn't post on Genel. This whole idea that one or two players can control the share price of a large company is bogus imo. In short term with deep pockets or high frequency trading an institution can push the price how it wants. But if wider market is moving in opposite direction all that happens is they'll lose money. Like a football being pushed into a swimming pool, shorting it down against buying pressure doesn't work. It's simple imo- if there's enough buyers in medium term the price goes up. Looking at chart, i think Pmo hit a double top at the beginning of January at 80p. We all know the Gann theory that double top signals a loss of confidence that share price is ready to go higher. And so it's proved, confidence had flagged. Other part of Gann theory though, is that the 4th try at breaking resistance level usually succeeds. Link as I guess many will say I made 4th time lucky theory up! hTtp:// Gann published 286 of his trades in advance in a newspaper. About 90% of them came off. I don't think anyone on advfn can trade this well. Absolute legend. Anyway doesn't matter too much, 4th or 14th attempt, I can wait. However, I can't prove the fundamental reason why we failed to break 80p in January. But IIRC: - it coincided with brexit vote which May lost. The chat then was a general election was option and therefore the prospect of a Labor government more likely. Corbyn wouldn't be good for north sea or Sea Lion approval imo and uncertainty is always bad. Since then option of early general election seems to have faded. - it coincided with Times article. timing was bad as it came at 80p inflection point. - share price had risen by about a third in three weeks. That's a fair bit in a short period so bound to be profit taking - brent was only $60. I haven't done the numbers but UBS have and they calculate at $60, pmo is only worth 77p NAV with the upgrade to the Catcher FPSO. The other part of this is that UBS calculate that with Sea Lion approved, Zama, appraised and Brent at $80, NAV is £2.90!! So there's an arithmetic reason why we are so geared to oil price and why the share price halved. No need to resort to exotic theories then. Occam's Razor anyone? Anyway, I think it's a reasonable opinion to believe someone else could run pmo better. He's 60 this year, must be near retirement. More difficult to understand is why Marvin wants to fist him in the car park at Nandos though. But i think Durrant leaving right now would be disruptive, Durrant will have lot of business knowledge and several projects are at key stages. Also the company strategy is tied to the BOD rather just Durrant. It's not like a AiM oily where the CEO is key, bigger oil is more of team game imo. So him leaving won't change strategy and operationally, PMO are now performing well under Durrant. Anyway I think the pmo specific problem that weighs on the share price is their strategy. They have so many options to sell assets or grow in Mexico, North Sea, Falklands etc. that it looks like they lack a plan. Big thing then is getting FID on Sea Lion and outline plan on Zama. Zama development should be cheap as they only have 25% of cost and intend to use appraisal wells already drilled as producers, but lots of uncertainty about plans and whether Zama should sold etc Unfortunately no listed company will tie their hands by ruling out a placing.But I don't see need for pmo to sell Zama or do a placing unless oil sinks badly. I'd say the possibility of pmo selling off assets in a fire sale has actually weighed on share price in past. They wouldn't get a good price if they sold Zama or SL undeveloped. Seems unnecessary, because if similar performance to Q4 continues they should be able to pay down more debt from cash flow this year than they'd get for Zama. However, what I think they should do counts for nothing, but imo Premier needs to clarify their story. Then they can up the PR and can say to institutions invest in us because they have a clear plan and certainty of funding in place to implement plan. They can say 'we're going to make pots of cash in Sea Lion', instead of woolly current situation of final decision hasn't been made. It's also my personal preference not to invest in exploration or the wait between discovery and funding in place. However once you have funding sorted, I think you can make good money waiting for first oil and the project to be priced in. Anyway, I think more clarity will come in next update in March and there ought to be significantly more interest in PMO with FID for Sea Lion sorted. But I think to see real value here you'll need to wait another 2 years for first oil at SL and Zama, not 2 weeks. Sorry long post.
rbonnier: What has got to happen here for the pmo share price to recover to a more realistic valuation ? Oil price recovery hasnt worked so whats going to snap the elastic bid story in the sunday telegraph ?
montevid: GS is manipulating the PMO share price with its controlling CFD position of approx.6% as well as the shorters: Shorter - Current Percentage - Effective Date AHL PARTNERS LLP - 2% - 2019-02-06 WHITEBOX ADVISORS LLC - 1.11% - 2018-12-18
seangwhite: POO going up lifts the PMO share price as we all know. Any hint of a rights issue will knock it back. The BOD were slow to react to the last rumours and not very proactive on the promotion front with the institutions.Let's hope POO keeps going up as the current BOD's efforts are fairly hopeless as shown by the share price graph.
Premier Oil share price data is direct from the London Stock Exchange
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