Companies: PMO   

Mid-cap oil and gas group Premier has been attracting positive attention from the market of late, seeing its share price rise encouragingly from 17p as a result. The main reason for all this was the transfer of the company's interests in the Yetagun and natuna fields offshore Indonesia and Myanmar (ex-Burma) to Amerada Hess and Malaysian group Petronas, in return for the cancellation of these two companies's (significant) shareholdings in Premier, plus cash and some debt. The company is now re-focused away from oilfield development on to exploration and what it calls 'commercial deal-making'. However the first two wells of its exploratory programme have failed to find enough oil to justify any field development and the market has started to re-evaluate the company, resulting in some reversals of recent gains. Profit-taking is entirely understandable in this context, especially given that Deutsche had set a 30p target for the shares after the original restructuring announcement. An update on this reiterated that the group plans to keep annual 'base production' at 30-35,000 barrels alongside its new focus. Investec's Jeff King says that 'there is better value in the sector at the moment'. £77.6m of pre-tax profit is expected for 2002, reducing to £48.4m in 2003 and EPS of 2.3p rising to 2.4p.