Premier?s 2015 Indonesian production stable in 2015

By Romel S. Gurky

British firm Premier Oil Plc announced on Thursday that its net production from Indonesia in 2015 on a working interest basis was stable at 13,900 boepd (2014: 14,400 boepd). A strong operational performance from the Premier-operated Natuna Sea Block A offshore Natuna Islands was offset, in part, by lower production from the non-operated Kakap field.

The Premier-operated Natuna Sea Block A delivered stable production into the Singapore gas market with gas demand above the contractual share for GSA1. Initiatives to optimise the cost base for Natuna have been delivered during 2015, with sustainable operating costs of US$8.0/boe.

Premier sold an average of 223 bBtud (gross) (2014: 231 bBtud) from its operated Natuna Sea Block A during 2015:

BBtud (gross)	GSA1		GSA2		GSA5
	2015	2014	2015	2014	2015	2014
Anoa	133	141	-	-	-	-
Gajah Baru	-	-	77	79	13	11
Total block A	133	141	77	79	13	11
Kakap	23	30	-	-	-	-
Total	156	171	77	79	13	11

GSA1 deliveries from Block A were 43 per cent (2014: 45 per cent) of all GSA1 deliveries, above the contractual share of 39.9 per cent. In addition Premier continues to provide additional gas sales of up to 40 BBtud from the Gajah Baru field to the domestic market under a Domestic Swap Agreement (GSA5).

In 2015, GSA5 sales were less than expected in the first half of the year due to competition from low price diesel fuel, but increased in the second half. End-users continued to make take or pay payments in full as per the terms of the DSA/GSA.

Gross liquids production from the Anoa field averaged 1.4 kbopd (2014: 1.6 kbopd) and gross liquids production from the non-operated Kakap field averaged 3.5 kbopd (2014: 3.9 kbopd).

Cost reduction initiatives have been delivered through optimization of work programs, reduction of discretionary spend, efficiencies through shared services with other operators in the area and contract renegotiations with existing suppliers. Based on current production levels, Natuna A is well placed to deliver operating costs of US$8.0/boe into the medium-term.

The Pelikan field was successfully brought on-stream in March within budget, following first gas from the Naga field in November 2014. The Pelikan and Naga gas fields, which contain 150 bcf of reserves, will maintain the production profiles of GSA1 and GSA2 and these fields are now fully tied into the Gajah Baru facilities. This increased deliverability from Natuna Sea Block A also allows Premier increased operational flexibility, the ability to fill any shortfall from other suppliers within the existing contracts and the potential to respond to any future increase in Singapore or domestic gas demand.

Elsewhere on Natuna Sea Block A, the next generation of developments to backfill our existing Singapore and domestic market contracts continue to progress. FEED has been completed on the Bison, Iguana and Gajah Puteri projects and an investment decision on these projects is targeted for the fourth quarter of 2016.

Evaluation of the potential development scenarios for the 2014 Kuda/Singa Laut discoveries on the Tuna Block, offshore Natuna Island remains ongoing. Premier is conducting a farm-out process with a view to reducing its 65 per cent equity interest in the block in order to manage its exposure going forward.

Editing by Johannes Simbolon