Premier Oil swings to £511.86 million of net loss in the fiscal H1

Premier Oil plc (LON: PMO) revealed to have swung to £511.86 million of net loss in the first six months of the current fiscal year. The company attributed the decline to non-cash write-downs valued at £481.39 million. In the same period last year, Premier had reported £92.17 million of profit.

Despite the loss, it expressed confidence that its annual fiscal 2020 report will announce it free cash flow positive. Director Anthony Durrant of Premier warned last week that UK’s oil industry was close to collapse.

Premier has been struggling with debt since 2014

When the oil prices plummeted in 2014, it fuelled an increase in Premier’s debt that continued in the subsequent years raising new challenges for the company. With COVID-19 weighing further on crude prices this year, the UK independent oil company tapped into all possible sources of financing and postponed repayments.

The oil major expressed plans of refinancing its gross debt facilities worth £2.21 billion with non-amortising facilities. It extended maturities by four years to March 2025 and set all interest rates at 8.34% on its debt.

Premier had £1.52 billion of net debt at the start of 2020 compared to a lower £1.50 billion by June end. The London-based company is scheduled to buy some of British Petroleum’s assets in North Sea fields. The purchase, as per Premier, will be funded via a new equity of £175.19 million that it will raise in the upcoming months.

It also hoped to raise an additional £228.51 million of fresh equity that will be directed at minimising its debt. Creditors will underwrite £156.15 million of the new equity.  

Premier Oil’s performance in the stock market

Shares of the company were reported about 6% down in premarket trading on Thursday. The stock tanked another 18% on market open. At 26.79 pence per share, Premier is still more than 100% up as compared to its year to date low of 12.63 pence per share in March. Wish it was easier to trade stocks online? Here is a simple guide to buying stocks online.  

In the fiscal first half, Premier’s per-day oil equivalent production printed at 67,300 barrels versus a higher 84,100 barrels in the same period last year. It plans on increasing production to 100,000 barrels later this year.

At the time of writing, the £248 million has a price to earnings ratio of 2.08.