North Sea heavyweight Premier Oil has underlined the potential of two bumper North Sea fields as it highlighted the benefits of growing production in the UK.

Shares in Premier surged nine per cent yesterday after the oil and gas independent said it had cut debts faster than expected helped by a strong performance by the giant Catcher field east of Aberdeen.

Read more: North Sea investment pays off for Premier Oil

The London-based company raised its production guidance for the year.

The rise in the shares may also have reflected investor excitement about the potential of a big find Premier made off Mexico last year. The company said the results of appraisal drilling on Zama suggested output from the field could reach 175,000 barrels daily.

The progress Premier has achieved recently will be welcomed in the North Sea at a time when some majors are shifting investment from the area to other basins they think have more potential.

Premier is thought to be in the running to acquire a big North Sea portfolio that US giant Chevron plans to offload.

Read more: Premier Oil shares plunge amid talk of potential $1.5bn deal

Chief executive Tony Durrant said in March there were powerful commercial reasons for the firm to continue to grow in the North Sea, without identifying any potential targets.

The company has shown firms can use the returns generated on investment in the UK North Sea to support potentially transformational exploration work in areas where there has been less drilling, such as off Mexico.

It appears to be reaping the rewards for its decision to expand in the North Sea amid the downturn triggered by the slump in the crude price from 2014 to early 2016.

Premier said it has increased UK production by 47 per cent year on year in 2019 with the rise driven by an increased contribution from the Catcher area.

The company brought Catcher onstream in 2017 after developing the field with Edinburgh-based Cairn Energy.

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Premier’s share of production from Catcher has averaged 34,400 barrels of oil equivalent per day (boepd) in the year to date. The field has achieved 99% operating efficiency.

“Formal project sanction of two Catcher satellite fields, Catcher North and Laverda, is targeted for later this quarter,” Premier told investors in a trading update issued yesterday.

Mr Durrant said Premier looked forward to concluding the Zama appraisal campaign and to drilling the Tolmount East well in the North Sea.

He said this has the potential to deliver a step change in value to the already high return Tolmount Main project in the Southern North Sea, which it approved last year. First gas is expected next year.

Premier’s progress will be monitored closely amid signs of growing interest in the gas-rich Southern North Sea off eastern England.

Royal Dutch Shell recently bought in to two licences containing prospects worked up by a relative minnow, Cluff Natural Resources.

Read more: North Sea exploration pioneer wins vote of confidence from Shell

Premier has faced challenges West of Shetland, which has attracted attention from a range of firms that see potential to make big finds in the area.

It has produced an average 4,100 boepd from the Solan field West of Shetland this year. When Solan was brought onstream in 2016 it was expected to be producing 20,000 boepd or more by the end of that year. Premier plans to drill another production well on the field next year.

Mr Durrant observed:“Production and free cash flow are ahead of forecast for 2019 and, consequently, we are reducing our debt faster than anticipated.”.

Production has averaged 85,100 boepd this year, up 14% on last time.

UK output rose to 57,400 boepd from 39,000 boepd.

Premier also has producing assets in Asia.

The firm raised its 2019 full year guidance to 75,000 – 80,000 boepd from 75,000 boepd in March when it posted a £100m annual profit.

Premier said it had generated around $80 million free cash flow this year, which was “ahead of forecast due to strong production and higher oil prices”.

It cut net debt from $2.33 billion at the end of 2018 to $2.25 billion at the end of April.

Shares in Premier Oil closed up 7.92p at 98.28p in London.