Premier To Divest N Sea Gas Assets
Premier Oil said April 30 it has agreed to sell its 47% operated interest in the North Sea Babbage area to Aberdeen-based independent Verus Petroleum. The interests include a 47% interest in the Babbage gas field, a 50% interest in the Cobra gas discovery and certain outstanding exploration commitments.
Premier said the deal is worth £62.9mn ($88.1mn) in respect of the Babbage field interest. In addition, Verus will take on exploration commitments valued at £17mn, resulting in net cash proceeds of £45.9mn to Premier. Further cash payments of up to £5.5mn are due to Premier if the Cobra discovery is developed. Completion of the transaction is expected in 2H 2018.
Premier said it anticipates recording a book gain on disposal estimated at over $70mn. CEO Tony Durrant said the sale “adds to the value realised from the E.ON portfolio" for $120mn in 2016.
Babbage production capacity at 100% equity is 70mn ft3/d; the field is 105 km northeast of Hull and supplies gas into the West Sole Bravo subsea gas pipeline operated by Perenco.
Verus also said April 30 it had agreed to buy a 17% non-operated interest in the Alba oil field from Statoil, adding 2,700 barrels of oil equivalent/day to Verus’s daily production. Statoil will retain its liability for the decommissioning costs. Verus is backed by European upstream oil and gas private equity investor HitecVision. (Banner photo is courtesy of Premier Oil)