Premier Oil confirms deal to acquire E.ON’s North Sea assets for $120m

By Niamh Forrest, Energy Voice

Premier Oil has confirmed it will acquire E.ON’s North Sea assets in a $120M deal. Premier will acquire interests in licence in the Central North Sea, West of Shetland and the Southern Gas Basin.

The Galaxy II jack-up rig at the Catcher field in the North Sea.

 

Premier Oil has confirmed it will acquire E.ON’s North Sea assets in a $120million deal.

The company said the deal had been funded from existing cash resources.

Earlier today the company confirmed it had suspended share on the London Stock Exchange.

Premier will acquire interests in licence in the Central North Sea, West of Shetland and the Southern Gas Basin.

This includes shares in Elgin-Franklin, Huntington, Babbage and Tolmount.

Speculation had begun building earlier today that E.ON was the subject of the reverse takeover.

The company said the deal would add significant production and associated cash flow this year and in 2017 even with the current low oil price.

It means the company will be operatorship in Huntington, Babbage and Tolmount.

The company also said the deal would allow it to share the abandonment cost of exposure on Ravenspurn North and Johnston with E.ON.

Premier Oil chief executive Tony Durant said:”In this challenging macro environment, maximising production whilst cutting costs is critical; both were achieved in 2015 and will continue in 2016.

“Selling our cash negative Norwegian business and re-investing in cash positive UK assets through the proposed E.ON acquisition, is value accretive and materially improves both our current and future financial position.”

Premier Oil said it had “significant liquidity” with cash and undrawn bank facilities of $1.2billion and a year-end covenant headroom in excess of $900million.

The deal comes days after the firm confirmed an oil find in the North Falkland basin.

Read more about the Premier Oil deal at Energy Voice.

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