Premier Oil Stock Soars On Decision To Stop Drilling

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Premier Oil Stock Soars On Decision To Stop Drilling

At a time when the energy market is in turmoil amid low oil prices, one U.K.-listed company is being rewarded for halting drilling at one of its wells. Premier Oil said today that because of numerous operational problems at its site in the Falkland Islands, it has dumped the contract it had with its rig supplier.

Premier ends drilling at Chatham well

According to The Telegraph, Premier Oil has ended the contract it had with Ocean Rig for Eirik Raude drilling rig located in Chatham on the Falkland Islands. The rig was covered under a contract that was signed in June 2014 with Noble Energy to drill at four or more wells in the Falklands.

The company said in a statement today that it will stop drilling there during its “current campaign,” although it continues to speak with the government on the islands about possibly drilling at the well again at some point in the future. The Chatham well was the last one in the exploration campaign in the Falklands.

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Rockhopper Exploration, which partnered with Premier on the Chatham project, said they intend to defer activities at the well until the approval of the predevelopment drilling campaign for the Sea Lion oilfield project is received, which is expected later this year. The company added that the deferral is “a shame” but said it wouldn’t impact the timeframe or planning for the Seal Lion oilfields project.

Premier Oil gobbles up massive acquisition

In January, Premier Oil acquired $120 million in gas assets from Eon, a German energy firm. The gas fields are situated west of the Shetland Islands