Zama news over the next couple of weeks might spark a little bit of interest, although I doubt it’ll do much for the share price. The inventory builds in the U.S. and Trump taking on the world has certainly put a damper on a summer oil price rally, well for now at least. Worryingly, there’s also some horrible PMI data out there which could have a material impact on oil demand growth.
Hopefully the final Zama appraisal well come in as expected and Premier put a big fat ‘For Sale’ sign up on the asset. Obviously we wouldn’t want to sell it cheap and I’m not going to pretend to know what we might get for it, but $400m+ would be a massive help in deleveraging the balance sheet, particularly when you look at our debt profile. Investor relations have confirmed that following payback of the ‘super senior debt’ we should be in a position to start paying back the expensive senior notes come the start of next year, so given that’s around $500m with average interest cost of 9%, a Zama sale and a good Q1 2020 might be able to wipe out the full lot, which would give us a massive saving each year in terms of finance costs, especially when added to savings of the $300m of debt we’ll pay down this year. I’m sure the board are looking at all the options, but should Sea-Lion be giving the green light this is definitely my preferred option.