Premier Oil's Catcher floating production project in the UK North Sea is on schedule to deliver first oil in 2H next year.
The UK-based independent says further cost savings have been secured against the project estimates. Premier now forecasts capex to first oil of US$1.3 billion and total project capex of $1.8 billion, a ca. 20% reduction on the original sanctioned estimates.
Further reductions in capex in dollar terms are anticipated if the weak sterling dollar exchange rate persists with about 60% of the project’s remaining capex denominated in sterling.
The Catcher area is expected to produce 96 MMboe, with a peak production rate of around 50,000 bo/d.
The development will comprise 22 subsea wells (14 producers and eight water injectors) on the Catcher, Varadero, and Burgman fields, tied back to a leased floating production, storage and offloading (FPSO) vessel, supplied by BW Offshore. Oil will be offloaded by tankers, while the gas will be exported through the SEGAL facilities.
The subsea installation campaign continues apace and remains on schedule for completion by Q4 2016: the flowline bundles, towhead and midwater arches have all been installed while installation of the buoy and mooring system is underway.
Risers and umbilicals will be installed this year. Five wells have now been drilled, including the first Burgman production well, with all meeting or exceeding pre-drill expectations.
Well sequencing has also been modified to avoid more costly winter rig moves and work continues to evaluate the potential to reduce overall well count without impacting production.
The FPSO hull has now been delivered to the Keppel yard in Singapore, while fabrication of the topsides modules is progressing well. The sail-away date of the FPSO from Singapore for a 2017 field start up remains on track.
Premier also continues to progress its other pre-development projects. In Indonesia, front end engineering and design (FEED) has been completed on the Bison, Iguana and Gajah Puteri gas fields and an investment decision on these projects is targeted for the fourth quarter of this year.
Work is ongoing on the Tolmount gas field development project in which Premier acquired a 50% operated interest through its acquisition of E.ON in April. Concept selection is targeted for 2H of the year.
In the Falklands, FEED on the Premier operated Sea Lion project is progressing well and identified cost reductions continue to lower the break-even oil price for the project.
Premier's west of Shetland Solan development, which came on stream, is ramping up to 14,000 b/d from the first well with the second well completed and due to be tied in shortly.
Tony Durrant, Premier's CEO, said: “Over the period, we have delivered a robust production performance, achieved first oil from Solan, completed the E.ON acquisition and reached key milestones on the Catcher project. We have continued to secure cost reductions across the business and are set to benefit from recent foreign exchange movements. We now look forward to a rising production profile and, with Solan on-stream, significantly lower committed capital expenditure. At current oil prices, we start to generate free cash flow later this year which positions us well to manage the balance sheet whilst retaining some optionality for future growth projects.”