Premier Oil failed to publish the full terms of a refinancing deal in a trading statement on Thursday but insisted it would be agreed within weeks.
The company, which is one of the biggest independent producers in the North Sea, has been in negotiations with its lenders for nine months to refinance its debt, which stood at $2.8bn at the end of December. The talks are aimed at securing a new arrangement until at least 2021.
Premier said in November it hoped to lock up the terms of a deal by the end of 2016 but full details of the proposed refinancing — which will need to be approved by 75 per cent of lenders — were not contained in its latest trading update on Thursday.
Tony Durrant, chief executive of Premier Oil, said discussions were sufficiently advanced with lending banks that the company should be able to announce a final agreement in a “few short weeks’ time”. A group of 40 banks account for about 85 per cent of the company’s borrowings.
“It really is, I believe, a formality,” he added. “The basic terms we announced in November, they still hold true.”
Premier Oil is the latest independent oil explorer and producer to refinance as companies have pressed ahead with capital-intensive projects in a climate of weak oil prices over the past two years. Rival North Sea developer EnQuest struck a $400m debt restructuring and equity fundraising package in October.
However, Mr Durrant stressed Premier would not be forced to issue new equity as a condition of the fundraising, although the company did say equity warrants would be included as part of the package.
“It wasn’t ever the case we needed new money,” he said on Thursday, adding that the company was seeking to extend some maturities that were coming up on its debts this year and next until 2021.
Premier has been forging ahead with the development of its new Catcher oilfield in the central North Sea, which is due to start up later this year. Total capital expenditure on Catcher is expected to be $1.6bn, the company said on Thursday, 29 per cent lower than original estimates.
Total production last year from Premier’s assets reached a record 71,400 barrels of oil equivalent a day, a 24 per cent increase on the previous year and in line with the company’s most recent guidance of 68,000-73,000 barrels a day, which was raised last year.
The group is guiding towards 75,000 barrels a day of production in 2017, before any contribution from the Catcher field.
Stephane Foucaud, analyst at First Energy, called the progress with the refinancing and lower than estimated costs for developing the Catcher field “encouraging”.