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Premier Oil ramps up oil production to pay off £2bn debt

Premier Oil is ramping up its oil production, taking advanta..

Premier Oil is ramping up its oil production, taking advantage of the four-year high crude prices to start paying off its $2.7bn (£2bn) debt.

The company announced that the Catcher field production had reached the promised 60,000 barrels per day and that it is on track to reach its set production goal of 80,000 to 85,000 barrels per day, after averaging 74,000 in the first quarter.

As a result, the company expects to generate increased cash flow due to the high crude prices which it will put into paying off its debt.

Read more: Oil prices surge to new high as 2m Iranian barrels go off the market

Chief executive of Premier Oil Tony Durrant said: “The improved commodity price environment puts us in a strong position to generate significant free cash flow in the second half of the year.”

“We are on track to deliver our plan of material debt reduction in 2018 and 2019 with selective investment in our future growth projects from 2020, once balance sheet strength has been restored,” he said.

The Tolmount project, one of Premier's fields in the southern North Sea, is set to be sanctioned later this year.

In 2017, the company's earnings went up to $589.7m (£437.4m) from $494.1m (£366.5m) theear before. However, the company made a net loss after non-cash impairments and one-time fees related to refinancing, and reduced its debt.

Read more: Oil prices under pressure since Trump's Iran announcement

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