Premier Seals BP Deals
Premier Oil has signed sale and purchase agreements (SPAs) with BP to buy the major's Andrew Area and Shearwater assets in the UK North Sea, it said on July 20.
The deal comes seven months after the acquisition was first announced. Since then it has undergone significant revision in light of the oil price collapse. Premier now only has to pay $210mn out of an initial purchase price of $625mn, with a further $115mn payable if oil prices rise above $55/barrel
"The signing of the SPAs with BP is another important milestone in completing the value-accretive BP acquisitions which consolidates the group's position in the UK North Sea," Premier CEO Tony Durrant said, adding that the deals would help deleverage the company's balance sheet.
The sales are expected to be closed by the end of September. Premier must first secure refinancing, hold an equity fundraiser and secure approval from its shareholders. The company is working with creditors to agree an extension of its debt maturities, and aims to present proposals to the full creditor group by the end of July.
BP owns 50-100% of the five fields that comprise the Andrew Area, along with a 27.5% stake in the Shell-operated Shearwater fields.
Premier announced another deal in January to acquire an extra 25% stake in the Tolmount gas project from South Korea's Dana Petroleum, but that purchase was cancelled in early July.