Premier Oil has reached another “important milestone” in completing the revised acquisition of BP’s stakes in two UK North Sea fields.
London-listed Premier has inked sale and purchase agreements reflecting the amended terms announced last month.
The purchase of the Andrew and Shearwater interests still hinges on Premier’s refinancing being secured, an equity fundraiser and shareholder approval.
Premier is working with creditors to agree an extension of its credit maturities and intends to present the proposals to the full creditor group for approval by the end of July.
The BP transaction, now expected to go through by the end of September, was initially expected to set Premier back £498 million ($625m), but a drop in oil and gas prices led to the deal be renegotiated.
Premier will now pay BP £167m upon completion, funded by the equity raise.
Up to a further £92m would be payable based on higher future oil and gas prices and would be generated from the revenues of Andrew and Shearwater.
BP will retain 100% of the Shearwater and 50% of the Andrew Area abandonment costs, resulting in an estimated £191m of obligations to be taken on by Premier.
Premier Oil chief executive Tony Durrant said: “The signing of the SPAs with BP is another important milestone in completing the value-accretive BP Acquisitions which consolidates the group’s position in the UK North Sea, one of our core areas, while, at the same time, accelerates the deleveraging of our balance sheet.”
BP owns 50-100% of the five fields which make up the Andrew area and 27.5% of the Shell-operated Shearwater field.
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