Premier snaps up BP North Sea oilfields

Debt-laden oil company announces plans to buy BP stake in two UK oilfields

                                

Premier Oil has announced plans to buy two North Sea oilfields from rival BP at a cost of $625m (£474m, €558m). The UK-based company will also secure an additional 25 per cent stake in the Tolmount gas project in a $191m deal with Dana Petroleum.

Premier will buy BP’s stakes in the Andrew and Shearwater fields, adding the cash equivalent of an extra 23,000 barrels of oil a day in production.

The purchases will be financed through a $500m equity raise, cash and, if necessary, a loan of $300m.

In a statement the company said: “Premier expects that the equity raise will include both a placing and rights issue component with any shares issued under the placing qualifying for the subsequent pre-emptive rights issue.”

Shareholder approval for the acquisitions will be sought at a general meeting in the first quarter of 2020, but might not be straightforward. Premier’s biggest creditor, Asia Research and Capital Management, has issued its own statement opposing the plans.

Premier, which is heavily in debt, also announced that it had extended its existing credit facilities until November 2023.

The news marks the latest stage in BP’s strategy of reducing its UK North Sea assets in favour of higher yields or lower production costs abroad.

“BP has been reshaping its portfolio in the North Sea to focus on core growth areas, including the Clair, Quad 204 and Etap hubs,” said Ariel Flores, BP North Sea regional president.

“As a result of this focus, we have also now decided to divest our Andrew and Shearwater interests, believing them to be a better strategic fit for another owner.”

Premier Oil shares jumped 13 per cent after the announcement.

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