Premier sets 2017 global plans

March 9, 2017

Premier Oil has revealed plans to drill offshore Mexico; the next phase of growth at Tolmount off the UK; and for the sanctioning of its BIGP project offshore Indonesia.

Map of Block 2, Block 7 offshore Mexico. Images from Premier Oil.

“Premier has a robust business which continues to deliver excellent operational performance,” says Tony Durrant, Premier chief executive. “In 2016 we achieved record production, maintained a low operating cost base and completed the highly value adding acquisition of E.ON’s UK upstream portfolio. Significant progress was made on our operated Catcher project, which will deliver a further step change in our production levels once onstream later this year.”

Premier posted a record production for 2016 with an increase of 24% at 71,400 boe/d in 2016, compared to 57,600 boe/d in 2015.

Mexico

Offshore Mexico, Premier plans to drill the large Zama structure in Q2 2017.

During 2016, the Talos-operated joint venture reprocessed the existing 3D seismic data and matured a number of prospects across its Blocks 2 and 7 in the Sureste Basin as candidates to be drilled in 2017 and 2018, says Premier.

“In particular, Premier and its partners completed the technical evaluation of their Block 7 acreage including the amplitude-supported Zama prospect, which has a well-defined flat spot, an indicator of potential hydrocarbons,” says Premier. “A rig has been contracted to drill the low-risk Zama prospect in Q2 2017 with the overall Zama structure estimated to have a P90- P10 gross unrisked resource range of 100-500 MMboe (the majority of which is on Block 7).”

Europe

Offshore the UK in the North Sea, Premier revealed that the front-end engineering design (FEED) program is now underway at the Tolmount field.

The offshore FEED contracts were awarded post period end and FEED is expected to take nine months with project sanction targeted for Q1 2018. It is estimated that capex to first gas will be around US$550 million, although Premier says it is currently engaging with the contractor market with a view to enhancing returns and reducing further upfront capex on the project.

Premier also says that the company has received several unsolicited offers of interest from a number of parties that are interested in scooping up 20% interest in Tolmount.

“The Tolmount field is looking increasingly attractive and is likely to provide our next phase of growth,” says Premier. “It meets our economic thresholds even at low gas prices, accelerates the use of our UK tax losses and allowances and fits well with our financial profile. There is also significant upside, currently estimated at over 400 Bcf, beyond the main development in the Greater Tolmount Area.”

At the Catcher project, first oil is set for 2H 2017. Its total capex is now estimated at $1.6 billion, 29% lower than at sanction. Premier says that the major elements of the subsea campaign are now complete with only short campaigns required in 2017 to tie-in wells as they become available from the drilling program, and to support commissioning operations once the FPSO has been installed. In addition, the construction phase of the FPSO is now largely complete and the focus is now on final integration and the completion of yard-based pre-commissioning and commissioning work scopes. Sailaway is expected mid-year with Premier continuing to target oil production start-up for later this year. Once onstream, the Catcher field has an expected plateau rate of over 50,000 boe/d.

Asia

Map of Vietnam.

Offshore Indonesia, FEED was completed in 2016 on the Bison, Iguana and Gajah Puteri (BIGP) fields, which marks the next generation of Natuna Sea Block A projects to support Premier’s long-term gas contracts into Singapore.

“Premier’s board sanctioned BIGP post period end. An invitation to tender for long lead items has been issued and delivery of first gas is targeted for Q3 2019,” says Premier.

Premier says it has identified several infill drilling candidates at Gajah Baru in the Natuna Sea Block A, with drilling currently anticipated to start in 2018. In addition, preparations are underway to re-complete the WL-5x well, which made the Lama discovery under Anoa in 2012 and to tie it into production in Q3 2017.

At its Tuna Block, Premier was granted a three-year extension to the exploration period of the license, which includes the Kuda Laut and Singa Laut discoveries. Premier says the extension will allow time for the company to undertake further appraisal drilling, and to establish a commercial development concept for the field, ahead of submitting a plan of development.

At Anoa Deep, seismic reprocessing is currently scheduled for this year to enhance the seismic imaging over the Lama Play area.

Offshore Vietnam, planning is underway for a program of further well stimulations at the Chim Sáo North West area in 2017. In addition, a two-well infill drilling program, scheduled to start in August 2017, will further help to maximize the field’s production levels. During 2016, Premier conducted a well intervention program, which included bringing a deep reservoir on to production in the Chim Sáo North West area, and the reservoir stimulation of three oil wells and a water injector well in the main field area. Premier has revised upwards its estimates of Chim Sáo’s remaining net 2P reserves by 13 MMboe to 31 MMboe.

Brazil

Premier is currently interpreting the 4000sq km of fast-track seismic data across all three of its Ceará Basin blocks. The company is working to map promising plays and prospects for future drilling locations on the blocks. Final processed broadband seismic data is due to be delivered in April 2017, and well locations will be selected from this during the course of 2017.

In August 2016, Premier obtained a license extension from the Brazilian Government (ANP) to July 2019 on its operated licenses CE-M-717 and 665. A similar extension was also obtained by Total, Operator of license CE-M-661. The extensions will enable Premier to realize further cost synergies with other operators in the Equatorial Margin with drilling operations planned for the 1H 2019.

Meanwhile, Premier exited the Foz do Amazonas basin, following the evaluation of new 3D seismic data across block FZA-M-90. The company’s 35% stake in the block was transferred to operating partner Quieroz Galvão E&P.



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