The crash in the value of sterling following Britain’s has boosted the fortunes of one of the country’s largest independent oil explorers.
said on Tuesday that its finances had improved by more than $100m as a result of the currency move following last month’s vote.
In the two and a half weeks since the referendum, nearly 13 per cent against the dollar to around $1.30. For companies like Premier, which spend in sterling, but receive revenues and report results in dollars, this has proved an immediate financial fillip.
“The exchange rate impact of Brexit has benefited us,” said Tony Durrant, Premier’s chief executive. “We have £500m of debt and letters of credit in sterling, which will now cost significantly less in dollars to repay.”
Mr Durrant said that the saving on capital spending on the Catcher project alone, its major development in the North Sea, was $100m.
Shares in the company rose 4.5 per cent to 72p on Tuesday as investors reacted both to the financial news and positive messages about the company’s production levels.
Premier said it had produced more oil than expected from some of its most important wells, especially from its North Sea operations. Both its Solan platform, west of the Shetland Islands, and the gas wells it bought from Eon, have performed above expectations, the company said.
“There are quite a lot of grounds for optimism on the production-side. We originally said we would produce 65,000-70,000 barrels of oil equivalent a day in the second half of the year. We now expect it to be at or above 70,000,” said Mr Durrant.
The company remains with its banks over refinancing its significant debt pile, which it said had stayed flat during the past three months — at $2.6bn of net debt. That is more than five times the $498m analysts expect it to make in earnings before interest, tax, depreciation and amortisation this year.
Tests on Premier’s banking covenants have been from June to July while those talks continue, and Mr Durrant said he expected them to be extended for another one or two months.
