Premier Oil said Wednesday it will take a $300 million impairment charge in its second half 2014 results due to low Brent crude prices.
The material impairment charge is currently estimated at $300 million on a post-tax basis and is tied to unspecified assets.
The UK-based company’s total 2014 revenues came in at $1.6 billion, a small jump from the $1.5 billion in revenues Premier earned in 2013.
Premier has already trimmed its operating costs and general and administrative spending for this year by about 10 percent.
Planned development spending for 2015 is expected to be around $600 million, a 40 percent drop over last year, while the company’s
pre-tax exploration budget is set at $220 million.
Premier said it is investigating a “number” of cost reduction initiatives including reducing further exploration commitments.
“In the light of the low oil price environment, negotiations with a number of key contractors are underway and development expenditure estimates are therefore subject to further review,” Premier said.
The company’s total production in 2014 hit 63.6 thousand barrels of oil equivalent per day, up about 9.3 percent over 2013.
“Premier is in a strong position to weather a period of oil price weakness due to its long term cash flow generation,” CEO Tony Durrant said.