Details of a deal between Premier Oil and its lenders over the North Sea explorer’s debt pile are expected to come out tomorrow.
London-listed Premier (LON: PMO), billed as the UK’s largest independent oil and gas firm, is $2.6billion (£2billion) in the red.
In recent times, it has been at risk of breaching covenants and potentially defaulting on loans.
Premier, which was forced to suspend its shares earlier this year, has been in talks with a consortium of around 25 banks for months in hope of finding a solution.
Its share price dropped almost 10% in the space of week at the start of July, despite the firm’s bosses saying the negotiations were progressing well.
In what could be a red letter day for Premier, the company will tomorrow publish its interim results.
The expectation is that they will reveal the ins and outs of a restructuring plan.
Until now, lenders have helped by waiving their claims to payments due from Premier.
And last month a test of Premier’s financial covenants was put off until the end of August.
Despite its financial woes, a number of recent milestones at Premier are thought to have convinced lenders to give the business more time.
It acquired producing assets from Germany’s E.on earlier in April in a £93million pound deal.
In July, boss Tony Durrant said the depreciation of sterling following the previous month’s Brexit vote would help steady the firm’s financial footing.
On the operations front, Premier confirmed first oil from its long-delayed Solan field west of Shetland, also in April.
Solan is expected to hit peak production later this year.
What’s more, Premier’s Catcher play, which was given the go-ahead two years ago, is expected to deliver a peak production rate of 50,000 barrels a day when it goes online next year.
Earlier this month Premier revealed a “significant” oil discovery in its Bagpuss prospect in the North Sea.
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