Premier today provides an Operations Update summarising key activities since the Interim Management Statement on 16 May 2013 and a Trading Statement in respect of its half year financials to 30 June 2013. This is in advance of the Group’s 2013 Interim Results which will be announced on Thursday 22 August 2013.

Simon Lockett, Chief Executive, commented:

“During the first half, we have made valuable discoveries across our acreage and we continue to build the materiality of our exploration portfolio with new licence awards. We have also successfully progressed our development and pre-development projects which underpin the company’s future strong cash flow growth.”

Production operations

Production averaged 58.7 kboepd in the first half of 2013 (2012 1H: 58.4 kboepd). A summary of the Company’s first half 2013 production is contained in Table 1 at the end of this announcement.

In the UK, the first half saw strong production from Wytch Farm, which is now producing in excess of 20 kboepd, due to the new Frome wells M21 and M22. The Scott and Telford fields have also performed above expectations. These were offset by lower production from the Balmoral Area due to a previously announced temporary shutdown of the Balmoral FPV in April and the recent shut-in of three wells pending intervention.

Elsewhere in the UK, initial reservoir and well performance at the non-operated Huntington field has been in line with expectations. Start-up problems with the gas export system have been addressed with oil production expected to ramp up to 20 kbpd shortly. Once the outstanding vibration issues with the second compression train have been resolved, this will allow the field to ramp up to full capacity.

The Anoa field on Natuna Sea Block A in Indonesia continued to achieve in excess of its 36.9 per cent contractual share of GSA1, delivering at around 44 per cent during the first six months of the year. A planned four week shut down of the Anoa facility, to complete work on the Anoa Phase 4 additional compression project, commenced on 21 June. As anticipated, strong deliverability from the nearby Gajah Baru field is able to cover a substantial proportion of Anoa’s contractual commitments under GSA1 during the shut down. In Vietnam, Chim Sao continues to produce ahead of original development plans achieving average production of 15.2 kboepd during the first half (1H 2012: 13.7 kboepd) despite production rates, in particular gas, being impacted by unplanned downtime of the power facilities on the FPSO.

Premier’s Pakistan fields produced ahead of expectations with first half production averaging 15.3 kboepd (1H 2012: 15.9 kboepd). The tie-in of the recently successful K-32 exploration well on the Kadanwari field commenced in May and first gas is expected in August. Recent successful infill drilling will also help mitigate natural production decline. In particular, the K-33 development well, which completed drilling in July, is expected to produce at 30-40 mmscfd once tied into the system later this year.

Production for the second half of the year is dependent on a number of factors, notably the ramp up of the Huntington field and Premier’s share of demand of West Natuna gas from Singapore. Premier’s current P50 estimate for full year production is 63 kboepd (2012: 57.7 kboepd) against previous guidance of 65-70 kboepd.

Development projects

On the non-operated Rochelle field, the West Rochelle well was successfully completed and tested in June. First gas is expected in September 2013, after the Scott platform summer shutdown, which is due to commence on 11 July, has been completed. Based on recent testing results, the field is anticipated to produce at an initial rate of 80 mmscfd and 3 kbopd (Premier interest 15 per cent). On 1 July, Nexen replaced Endeavour as operator of the field (the partners’ equity stakes in the field are unchanged).

In Indonesia, the final platform installation work on the Premier-operated Anoa Phase 4 project commenced on 8 June and is expected to be fully commissioned by September, with first gas coming in earlier, at the end of July. The project will commercialize around 200 bcf of undeveloped proven reserves in the Anoa field on Natuna Sea Block A.

The Dua, Pelikan, Naga and Solan projects are all expected onstream in 2014. The pipe lay work for the Pelikan and Naga projects was completed in June and the wellhead platforms are due to be installed in the third quarter of the year. On Dua, a three well subsea tie back to Chim Sao in Vietnam, development drilling will begin in the fourth quarter with two of the development wells expected to be completed by year end. At the West of Shetland Premier-operated Solan field, development drilling, which commenced in April, continues.

On the Premier-operated Catcher project, the three shortlisted contractors for the leased FPSO tender, which was initiated at the beginning of the year, continue to progress FEED work ahead of submitting final bids in August. Meanwhile, the concept selection process on the Premier-operated Falklands Sea Lion project is well under way and Premier expects to update the market with the outcome of that process at its Interim Results announcement in August.

Exploration and appraisal

All four of Premier’s exploration wells drilled in the first six months of the year have been successful. This includes near-field successes in the UK, Indonesia and Pakistan and the significant oil discovery made at Luno II on the western margin of the Utsira High in the Norwegian North Sea. The Luno II discovery will be appraised in the fourth quarter of this year.

In total, nine exploration and appraisal wells (see Table 2 at the end of this announcement) are planned for the remainder of the year. This includes the Lacewing prospect, which spudded in April and is targeting an underexplored Triassic play on the Eastern margins of the Central North Sea, and the potentially play-opening Ca Voi prospect offshore East Vietnam, which spudded in June. The results of these two wells are expected before the end of July.

Looking ahead to 2014, Premier plans to drill around 12 wells in 2014, including a minimum of four high impact exploration wells. These include two wells offshore Kenya, at least one well on Natuna Sea Block A targeting the Lama play which was successfully drilled by the Anoa Deep well in 2011, and the Myrhauk prospect on the eastern margin of the Mandal High in the Norwegian Central North Sea. Prospect maturation also continues in advance of high impact exploration drilling on our acreage in the North Falklands Basin. Meanwhile plans are advancing for seismic acquisition across Block 12 in Iraq and across the three blocks acquired in Brazil’s 11th Round in May.