Premier Oil sells Norwegian business

Premier Oil has agreed to sell Premier Oil Norge AS (PONAS), which comprises all its Norwegian assets, to Det norske oljeselskap ASA for a cash consideration of $120 million.

The proceeds will be used to pay down the company’s debt and represents another step in Premier’s previously stated program of portfolio management. The transaction is subject to the receipt of government approval and is expected to complete by year’s end.

PONAS comprises the Premier-operated Vette development and adjacent Mackerel and Herring discoveries (50% interest), a non-operated interest in the Frøy field (50% interest) and seven exploration licenses.

As of June 30, PONAS had net assets of $146.3 million (comprising gross assets of $189.9 million and liabilities of $43.6 million). For the year ended Dec. 31, 2014, it generated an operating loss of $17.4 million.

Premier has been operating in Norway since 2005 and has realized value through previous disposals of the Grosbeak, Blåbaer, and Luno II discoveries, which have resulted in combined proceeds of $33.5 million.

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