Premier is aiming to conclude the acquisition by the end of September after raising the funds through an equity raise
Premier Oil signs SPAs to acquire BP’s North Sea assets. (Credit: Michal Jarmoluk from Pixabay.)
UK-based oil and gas company Premier Oil has signed sale and purchase agreements (SPAs) with BP to acquire its interests in the Andrew Area and its Shearwater assets.
The agreement follows the revised terms reached for the deal last month. Under the revised terms, Premier will pay BP $210m on completion of the deal.
Premier is aiming to conclude the acquisition by the end of September after raising the funds through an equity raise that is expected to include a pre-emptive component.
Premier Oil CEO 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.”
Premier Oil to add low cost, producing assets
The acquisition are expected to strengthen Premier’s business through the addition of operated, low cost, producing assets.
The Andrew Area and Shearwater assets are also anticipated to accelerate the use of Premier’s $4.1bn of UK tax losses.
BP will retain 100% of Shearwater abandonment costs and 50% of the existing Andrew Area abandonment costs that will leave Premier with an estimated $240m of abandonment obligations.
The acquisitions include BP’s operating interests in the Andrew area and a non-operating 27.5% stake in the Shell-operated Shearwater.
The Andrew assets are the Andrew platform, five fields, and associated subsea infrastructure. The five fields in the Andrew Area, which are involved in the deal are Andrew, Arundel, Cyrus, Farragon, and Kinnoull, which produce via the Andrew platform, located about 225km north-east of Aberdeen.