Offshore staff
LONDON – Premier Oil has signed sale and purchase agreements for BP’s interests in the producing Andrew Area (operated) and the Shearwater field in the UK central North Sea.
The two companies agreed on revised terms for the transaction early last month, under which Premier will pay BP $210 million on completion of the acquisitions.
Premier aims to conclude the process by the end of September after raising the funds via an equity raise.
In addition, BP would be entitled to up to a further $115 million based on higher future oil and gas prices, with this sum to be funded from production revenues from the assets.
At the same time, BP has agreed to retain 100% of its share of the current Shearwater abandonment costs and 50% of the existing Andrew Area abandonment costs.
This will leave Premier with an estimated $240 million (pre-tax) of abandonment obligations.
Last year, production from the Andrew Area and Shearwater interests averaged 19,100 boe/d and 4,400 boe/d, respectively, generating more than $300 million of net cash flow.
Premier’s entry into Shearwater will be conditional upon the Shell-led partnership not exercising their own rights to acquiring BP’s interests in that field.
07/20/2020
