PREMIER Oil has pushed back the expected start of production from the giant Solan field West of Shetland and slashed the valuation of the asset.

Solan is one of three UK oil and gas assets whose book value has been cut by a total $730m (£470m) by Premier, or around $300m after tax.

The cut in the valuation reflects factors including the slump in the oil price since June and the complications Premier has faced with the flagship Solan development.

However London-based Premier said the fall in the oil price may create opportunities to buy assets in the UK North Sea at bargain prices.

"We are expecting in the second half of the year to see opportunities to add to our asset base when the market is potentially quite weak," chief executive Tony Durrant told Reuters

Premier said the commissioning of production facilities that have been installed off Shetland has taken longer than anticipated due to poor weather conditions and low productivity over the winter period.

" As a result, costs have increased and first oil is now expected to be later than the previous guidance of the second quarter," said Premier.

The company said it will provide further updates to the market as the work progresses.

Premier said it continues to target plateau rates of production from the field of 20,000 to 25,000 thousand barrels of oil per day by year-end.

The company noted the unquantified impairment charge in respect of Solan partly reflected an increase in the costs incurred to date and expected costs to completion.

The fall in the oil price was also a factor.

The update provides further evidence of the challenges firms can face operating in the stormy waters off Shetland.

On Wednesday Petrofac said it recorded a $200m loss last year on a contract to build the giant Laggan-Tormore gas terminal on Shetland for Total.

The company has said it had 300 days of interruption on Laggan-Tormore because of high winds and poor weather.

The other Premier assets covered by the write downs are the Balmoral area and Huntington fields off eastern Scotland.

Premier said the principal cause of the impairment charge is a reduction in the company's short to medium-term oil price assumption.

A review of the expected decommissioning costs for the Balmoral area also influenced the calculation .

Mr Durrant cautioned: " it is not clear at this stage when the oil price will find a floor, or how long it may take to recover."

Last month Premier asked contractors to take a 10 per cent pay cut in response to the slump in the oil price.

The company said then it had cut the valuation of some assets by $300m after tax without giving details.

Premier gave more positive news about work on the giant Catcher field off eastern Scotland yesterday.

It said work was progressing on budget and on schedule and the project is well into the execution phase.

First oil is targeted for mid 2017.

Premier noted it sold off the "high cost" Scott area assets in the UK North Sea for $130m in December.

But the company increased production in the UK to 19,400 barrels oil equivalent daily in 2014, from 14,900 boed, helped by the fact some fields were online for longer than they were the preceding year.

The group, which also has interests in Asia and Africa, increased output to a record 63,600 boed from 58,200 boed last time.

It lost $210m after tax and write downs, compared with a $234m profit in 2013.

The company has scrapped its dividend for the full year. It has scaled back plans to develop the Sea Lion field off the Falkland Islands to reduce spending.

Premier recognised a total $52m impairment charge in respect of three fields outside the UK.