Premier to boost stake in Wytch Farm assets

By OGJ editors
HOUSTON, June 20
– Premier Oil PLC has agreed to acquire a further 17.715% interest in the Wytch Farm assets on England’s southern coast for an initial $96 million in cash.

The proposed deal will hike Premier’s interest to 30.1% from 12.38% and add 12.5 million bbl of oil equivalent of probable and contingent reserves and resources as of Jan. 1, 2011. The field is producing 13,000 boe/d.

Premier will support the transition of operatorship to Perenco UK Ltd., which will on completion of the transaction hold a 50.1% interest in the assets.

BP in May said it had reached an agreement with Perenco to dispose of its approximate 68% interest in a portfolio of onshore and offshore assets in Dorset, including the PL089 and P534 licenses and associated tax allowances relating to Wytch Farm for a consideration of up to $610 million. Under the terms of the operating agreements over the Wytch Farm assets, Premier has certain preemption rights in the event of a sale to a third party.

Premier has also entered into an agreement with Perenco setting out the basis on which the acquisition of the Wytch Farm assets will be carried out as between Premier and Perenco, including the basis on which tax allowances will be allocated.

In addition to the initial consideration, Premier will pay a further $14.4 million if the Secretary of State for Energy and Climate Change approves development of the Beacon discovery on Block 98/7a and-or in accordance with an agreed methodology relating to the average oil price between 2011 and 2013. Premier will pay an $86.5 million deposit.

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