UK oil company Premier Oil said in a trading update on Thursday that it had reduced its debt to US$2.3bn at the end of 2018, below its previous forecast of US$2.4bn.
This constituted a reduction of US$390m on 2017 debt levels.
Its full-year production was 7% higher than in 2017 at 80,500 boepd, with November and December 2018 production averaging more than expected at 92,000 boepd.
"Our strong operational performance and disciplined expenditure have enabled us to reduce our debt levels ahead of forecast. At the same time, we have continued to build our portfolio for the future, sanctioning our high value Tolmount Main gas project and capturing highly prospective new acreage in Mexico and Indonesia," said Chief Executive Tony Durrant.
"Looking to the year ahead, we have a strong production base which is well hedged and our priority remains to further reduce our debt levels while progressing our future growth projects to final investment decisions," Durrant added.
Premier had hedged 36% of its forecast oil entitlement production to end 2019 at an average of $70/bbl.
The company had also sold forward 50m therms of its 2019 UK gas volumes at an average price of 61p/therm.
In addition, it had hedged part of its 2019 and 2020 Indonesian gas production through the sale of 150,000 MT and 105,000 MT of HSFO Sing 180 at an average price of US$394/MT and US$387/MT,respectively.
With an improved portfolio mix, supported by increased high margin Catcher barrels, and a strong hedging programme, Premier said it was "well placed" to deliver further debt reduction in 2019.
The current weaker Sterling exchange rate and strong UK gas prices were also helping to mitigate against the recent oil price volatility. On a full-year basis, Premier expected to generate positive free cash flow at oil prices above US$45/bbl during 2019.