Oil price depresses profit at Premier Consolidated

PREMIER Consolidated Oilfields, the oil exploration and production company, has suffered a 20 per cent fall in operating profits, largely because of the weakness in the world price for oil.

Results for 1993 were made considerably worse by an pounds 8.8m exceptional cost relating to the changes in petroleum revenue tax.

The changes came in the March Budget last year. Premier had been counting on tax relief on exploration expenditure. The pounds 8.8m exceptional charge was the cost of meeting the increased liability.

Before the one-off, profits fell to pounds 13.3m from pounds 16.8m. Earnings per share, however, which include the effect of the exceptional charge, fell by 91 per cent to 0.23p. Operating revenue suffered from the lower oil price, which averaged pounds 10.64 compared with pounds 10.87 in 1992.

Charles Jamieson, chief executive, said the company was currently dealing with oil at pounds 9 a barrel. He added: 'We are not looking for any major price increase and we are reasonably comfortable with the oil price at these levels.'

Premier also had less oil to sell in 1993 because production at its Wytch Farm oilfield in Dorset was disrupted by routine maintenance. Production from its Angus field in the North Sea is declining because reserves are becoming exhausted.

Premier produced 12,000 barrels of oil a day in 1993 compared with nearly 14,000 in 1992.

The group has oil and gas interests in the UK, Jamaica, Tunisia, Pakistan, Cuba and the Far East. It is focusing particular attention on potential in Burma and Thailand.

Capital expenditure on exploration and development ran ahead of cash flow into the business during 1993. It spent pounds 23.4m on investment and generated pounds 21.1m of cash. The company expects its production output to rise to 20,000 by 1996.

The shares have fallen steadily over the past four years as the price of oil has declined. They were unchanged at 25.5p yesterday. There is no dividend.

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