Premier Oil hit by sharp fall in profits

FALLING OUTPUT in the UK and Indonesia and a 28 per cent fall in oil prices resulted in a sharp fall in profits at Premier Oil, the exploration and production company with operations in the UK, Pakistan and South-east Asia.

Turnover in the six months to the end of June was down by 30 per cent at pounds 61.7m and operating profits more than halved to pounds 20.1m. After taking out interest charges and exchange rate losses, profit before tax fell from pounds 38.3m to pounds 13.3m.

On the credit side, discoveries in Indonesia and Pakistan have added 130 million barrels of oil equivalent to anticipated oil reserves, an increase of 39 per cent.

Premier's shares have halved in value since May. They fell a further 1.5p to 26.75p yesterday after the chief executive, Charles Jamieson, said the company was not in current takeover talks.

Oil shares, including Enterprise Oil, Lasmo and Tullow Oil, were undermined by new forecasts from Fergus McLeod at BT Alex.Brown, who cut his average crude price forecast for this year to $14.50 a barrel, from $20 to $16 for 1999 and from $20 to $18 for 2000. Mr Mcleod had been bullish on prices.