Premier Oil plans to overtake the North Sea Oil & Gas Reserves.
Premier Oil have been granted approval by a UK court to take over the North Sea gas and oil fields. However, they must beat a creditor vote.
The company plans to buy five gas fields and a stake in the Shearwater field from BP for $625m.
They hope to purchase a 25% stake in the Tolmount field for $191m, with $55m contingency payments.
A representative of Premier Oil said “this will strengthen Premier Oil’s position. With assets forecasted to generate over $1 billion of fee cash flow to the end of 2023”.
According to Asia Research and Capital (ARCM), Premier Oil owes its creditors over $2 billion. In order to acquire the oil and gas fields, requires creditors owning more than 75% to agree the purchase.
The creditors of Premier Oil have said it will ‘vigorously contest’ the acquisition of the fields.
ARCM said in a press release “ARCM is deeply concerned about Premier Oil’s intention to pursue acquisitions, as this will increase the risk for all stakeholders.
We are also concerned about the supply and demand dynamics of the UK gas market & also the potential impact on the company’s capacity to generate cash flow.
A spokesmans for Ad Hoc Creditors (a group which supports Premier Oil’s plans), stated “The agreement to proceed with the Scheme of Arrangement is an important step in securing a strong platform for Premier Oil’s future success.
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