• 4 minutes Get First Access To The Oilprice App!
  • 7 minutes Blame Oil Price or EVs for Car Market Crash? Auto Recession Has Started
  • 11 minutes Japanese Refiners Load First Iran Oil Cargo Since U.S. Sanctions
  • 13 minutes Oil prices forecast
  • 10 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 3 hours Oceans "Under Fire" Of Plastic Trash
  • 13 hours Emissions from wear of brakes and tyres likely to be higher in supposedly clean vehicles, experts warn
  • 19 hours How Is Greenland Dealing With Climate Change?
  • 13 hours Nuclear Power Can Be Green – But At A Price
  • 5 hours Algorithms Taking Over Oil Fields
  • 17 hours Is Natural Gas Renewable? I say yes it is.
  • 19 hours Germany: Russia Can Save INF If It Stops Violating The Treaty
  • 8 hours Europe Slipping into Recession?
  • 14 hours Socialists want to exorcise the O&G demon by 2030
  • 10 hours UK, Stay in EU, Says Tusk
  • 1 day Saudi Private Jet Industry Stalls After Corruption Crackdown
  • 2 hours Orphan Wells
Crude Oil Inventory Draw Fails To Move Market

Crude Oil Inventory Draw Fails To Move Market

Crude oil prices didn’t move…

Premier Oil Set to Announce $3.35B Refinancing Deal

Premier offshore rig

London-based Premier Oil is close to unveiling a £2.6-billion (around US$3.35 billion) restructuring agreement with lenders as it seeks to avoid defaulting on its loans amid the low crude oil prices, The Telegraph reports.

Premier Oil – the UK’s largest independent oil and gas group – is expected to announce details on its restructuring plan later this week, on August 18, when it reports its first-half results.

Earlier this month, the group said it had agreed to a further deferral of its financial covenants until August 31, 2016 from July 31, 2016 as it continued to hold talks with lenders on existing debt arrangements.

Premier Oil has taken on more loans to fund its ambitious projects in the North Sea. In April, the company announced its first test output from the offshore Solan field near Shetland. When maximum production rates at Solan are reached, it will yield about a third of Premier Oil’s current daily output, which at the end of 2015 stood at 57,600 barrels per day. For this year, the company projects average daily output of 65,000-70,000 bpd.

In its trading update in July, Premier Oil said that it expected to report on August 18 total revenues for the first six months of around US$390 million, compared to US$577 million for the same period of 2015. Net debt was estimated at some US$2.6 billion as of June 30, 2016.

Solan is currently producing at a rate of 11,000 barrels per day and is ramping up to 14,000 bpd from the first production well with water injection providing reservoir support, Premier Oil noted, expecting full-year production at or above the upper end of the previous guidance of 65,000-70,000 bpd.

Premier Oil’s current agreements with lenders envisage keeping below the net debt-to-earnings ratio of 4.75, but the crude price crash would make the company breach that threshold with a 5.2 ratio. According to The Telegraph, the restructuring deal would relax the debt covenant to a net debt-to-earnings ratio of 6.0 from 4.75.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News