Premier Oil would be “more than happy” for the infrastructure on its Solan field to play a part in Hurricane Energy’s plans west of Shetland, its boss said yesterday.
Chief executive Tony Durrant said Solan was “surrounded by basement plays” and Premier wanted to be involved in their development.
He also said Premier was “looking at” potential North Sea acquisitions, although reducing debt is the main focus for the London-based firm in 2018.
Mr Durrant said Premier would be interested in increasing its stake in the central North Sea Catcher field, which started producing in December.
Hungarian firm MOL Group is understood to be mulling over the sale of its UK offshore portfolio, which includes a 20% stake in Catcher.
A final investment decision on the southern North Sea Tolmount project should arrive later this year, providing the “next phase of growth” for Premier.
Mr Durrant was speaking after Premier reported pre-tax losses of £263million last year, an improvement on losses of £297million in 2016.
Sales increased by 11% to £750million in the latest period as production climbed 5% to 75,000 barrels of oil per day.
Net debt dropped to £1.95billion at the end of last year, from £1.98billion 12 months earlier.
Analysts at RBC Europe said Premier’s debt reduction drive would likely accelerate into the second half of 2018, reaching £1.62billion by year-end.
Premier’s cause will be helped by Catcher, which is expected to be producing 60,000 barrels per day by April,
But Solan has continued to be problematic. The firm booked an impairment charge of £180million, mostly due to a reduction in reserves expected to be recovered from the field.
Solan was originally forecast to deliver first oil before the end of 2014, but budgetary issues and bad weather resulted in delays. First oil was finally announced in April 2016.
Yesterday, Premier said it was assessing ways to improve production from Solan.
The drilling of further wells is one option, while the company could also invite other firms to use its infrastructure west of Shetland. The area is home to a large number of producing oil fields.
Mr Durrant said Hurricane, which is also headquartered in London, was “excelling” in its efforts to develop basement plays.
Hurricane specialises in pursuing reservoirs within “naturally fractured basement reservoirs” where the oil lies not in the rock, as is the case with sandstones and chalk, but within the fractures.
It has made major discoveries on its acreage, which is concentrated on the Rona Ridge, west of Shetland.
“If Hurricane is successful, then we would be more than happy for Solan infrastructure to play a part,” Mr Durrant said.
Hurricane is already working on an early production system for its Lancaster field, with first oil slated for the first half of 2019.
Analysts have estimated the Greater Lancaster Area, which includes the Halifax well, may contain 1billion barrels of oil.