Oil & Gas Corporate News
Almost £2bn was wiped off the market values of UK North Sea oil and gas producers yesterday, after the Government announced an unexpected £10bn tax grab over the next five years. This announcement provides a more level playing field as far as fiscal/political risk is concerned and is very good news for the development of oil and gas projects elsewhere in the world.
Max Petroleum (LON:MXP) (BUY, £0.50) (MXP, 16.25p, ? 1.56%) announced that it has commenced drilling the ZMA-ET1 appraisal well in the Zhana Makat Field on Block E. The total depth of the well will be approximately 1,450 metres, targeting Triassic reservoirs.
Premier Oil (LON:PMO) (PMO, 1911p, ? 3.97%) released its annual results. Operational highlights: 2010 production of 42.8kboepd (2009: 44.2kboepd); on target for 75 kboepd in 2012; Material progress on operated Chim Sao and Gajah Baru fields, due on-stream in 2011; Huntington on track with first oil and gas expected within 12m; Portfolio of development projects approaching project sanction which will contribute towards production of around 100 kboepd by 2014; Eight out of 14 exploration and appraisal wells drilled in 2010 were successful, including the discoveries in the Catcher area in the UK; Proven and probable reserves increased to 261mmboe (2009: 255mmboe), a reserve replacement ratio of 138%. Reserves and resources increased to 488mmboe (2009: 468mmboe). Financial highlights: Record profit after tax of US$129.8m (2009: US$113.0m); Operating cash flow of US$436.0m (2009: US$347.7m), an increase of 25%; US$1,100m of UK tax allowances mitigating impact of proposed UK tax changes; Rising cash flows and increased funding in place to cover ongoing development and growing exploration programme. Debt facilities expanded and maturities extended; Net debt was US$405.7m (2009: US$315.6m), representing gearing of 36%. Cash and undrawn bank facilities (including letter of credit facilities) of US$1,202m at year-end (2009: US$649m). Outlook: New projects on-stream will push first quarter 2012 production run-rate to around 75kboepd; Development drilling on Gajah Baru successfully completed during the first quarter, Chim Sao development drilling continues well and Huntington development drilling programme will commence in the second quarter; Final development sanction for several projects expected during the year. Agreement reached to acquire a 60% interest in the Solan field; Pre-development planning for the Catcher area under way to follow successful completion of exploration programme; Planned 20 exploration wells in…
