(Adds production forecast, hedging details, Rockhopper comment)
LONDON, Nov 13 (Reuters) - Oil and gas explorer Premier Oil has scaled back its Sea Lion oilfield project north of the Falkland Islands after it struggled to find a partner for the project and weak oil prices have put pressure on the company to cut costs.
The London-listed oil firm now plans to develop fewer wells at the site for less than $2 billion of project capital expenditure, compared with around $4 billion initially expected for the larger project.
“The new lower oil price environment and our commitment to maintaining a strong financial position has caused Premier to re-examine the scheme with a view to reducing the capex,” the company said in its third-quarter results statement.
The smaller project, expected to recover 160 million barrels of oil in 15 years, may make it easier to attract an investment partner due to the lower financial contributions needed.
Premier Oil’s partner on the Sea Lion project, Rockhopper, said in a separate statement on Thursday that the first oil was expected to flow from the field in 2019.
Premier Oil Chief Executive Tony Durrant, who was promoted from chief financial officer in June, said he expected his firm’s full-year production to climb above the high-end of a 58,000-63,000 barrels-per-day target.
Production so far this year has already averaged 64,000 barrels per day mainly thanks to higher output from British and Vietnamese fields.
Premier Oil also said it was in a strong hedging position to shield its business from falling crude prices.
For the fourth quarter, the company has sold forward 1.4 million barrels of dated Brent oil at an average price of $102.9 per barrel.
Brent crude fell below $80 per barrel on Thursday.
“This is a solid update from Premier against the backdrop of weak oil prices and the adjustment to the planned Sea Lion development makes sense,” said Mark Henderson, analyst at Westhouse Securities.
Premier Oil shares traded 0.2 percent higher at 1228 GMT. (Reporting by Karolin Schaps; editing by David Clarke and David Evans)