North Sea focused oil and gas producer Premier Oil said on Wednesday it expected to make cash this year based on current futures contract prices, upgrading its outlook after saying in May it expected to be cash flow neutral this year.
It hedged just over a fifth of its output in the second half of the year at around $56 a barrel of oil equivalent. Current benchmark oil prices stand at around $43 a barrel.
It expects first-half revenue of about $530 million, Premier said.
"As a result of the recent improvement in commodity prices together with the action taken by Premier during the first half of the year to reduce its 2020 expenditure, the Group now expects to be free cash flow positive (after interest) for full-year 2020 based on the current forward curve," it said.
Net debt at Premier, which had a market capitalization of $524 million before trading opened on Wednesday, stood at $1.97 billion at the end of June, broadly unchanged from December.
It is in discussions with creditors to extend debt maturities by more than two years into 2023.
Premier expects output of between 65,000 and 70,000 barrel of oil equivalent per day (boed) this year.
After BP sweetened the sale of some of its North Sea fields to Premier last month, the smaller group expects its output to rise by 17,000 boed from September.
Further growth later this year is due to come from the British Solan field at 10,000 boed as well as at least another 20,000 boed when its Tolmount gas project comes on line in the second quarter next year.
(Reporting by Shadia Nasralla; editing by Jason Neely)
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