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Premier Oil increases its UK production by 56 per cent

PREMIER Oil has highlighted its progress in the UK, where the company is investing heavily in areas like the North Sea.

In an update on trading, Premier said it had increased first half production in the UK by 56 per cent, helped by bringing new North Sea fields onstream.

The London-based company produced an average 21,200 barrels oil equivalent per day in the UK in the six months to 30 June compared with 13,600 boepd in the same period last year.

Premier increased total group production around 10 per cent in the first half to 64,700 boepd, from 58,700 boepd in the first half last time.

Revenues increased to $880m (£515m) from $758m.

The increase in UK output partly reflects the start of ­production from the Huntington field in the Central North Sea in April last year.

Premier said then the asset would make a significant contribution to its worldwide production and cash flow growth.

Premier has a 15 per cent ­interest in the Rochelle gas field in the North Sea, which Chinese-owned Nexen brought onstream in October last year.

Premier said it achieved good performance from the assets it runs in the Balmoral area, 120 miles north east of Aberdeen. This was driven by strong production from its 100 per cent owned Brenda field. Production from the Wytch Farm field onshore in Dorset was also strong in the first half, with four additional wells being brought on-stream.

Led by chief executive Tony Durrant, the company can use the cash generated in the North Sea to fund exploration and development work in the UK and on its overseas operations in Asia and the Falkland Islands.

Premier appears to be making good progress with work on the £1 billion development of the giant Catcher field, 100 miles off Aberdeen

The company recently got ­official approval for the Catcher development, one of the biggest in the North Sea for years.

Catcher is due onstream in 2017. Production is expected to peak at 50,000 boepd. Premier, which operates the field with a 50 per cent interest, will be in line for half the output.

Edinburgh-based Cairn Energy has a 30 per cent stake in Catcher.

"All major contracts for the project have been awarded and the project is progressing to plan in the execution phase," said Premier of Catcher yesterday.

The company underlined its faith in the potential for developing more North Sea finds.

Premier said it plans to appraise the heavy oil play at Bagpuss/Blofeld in the UK North Sea in 2015 subject to rig availability.

However, the company may sell off acreage in the North Sea under its plans to focus investment on core assets.

In June, Premier agreed the $130m sale of its Scott area assets in the UK North Sea to Hungary's MOL.

The company noted: "Premier continues to high grade its exploration portfolio and over the first six months of the year the company either sold or relinquished 18 licences, predominantly in the UK North Sea. Further rationalisation of the exploration portfolio will be completed in the second half of the year."

Separately, North Sea focused Ithaca Energy said it produced 14,400 boepd in the second quarter, in line with the company's pro-forma 2014 production guidance range of 13,500 to 15,500 boepd.

The figures include the production Ithaca will gain through the acquisition of stakes in three North Sea fields from Sumitomo of Japan, for $170m.

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