Premier, KUFPEC Acquire Interest in Bream Field (Norway)

Premier Oil has announced that, in conjunction with KUFPEC Norway AS (KUFPEC), it has agreed to acquire a 40 per cent interest in PL407 from BG Norge AS (BG). PL407 contains the Bream field and is on the Norwegian Continental Shelf.

KUFPEC will acquire a 30 per cent interest while Premier will increase its existing 40 per cent equity interest to 50 per cent and assume operatorship of PL407 and the Bream project. The aggregate consideration payable by Premier and KUFPEC will be $22.2 million prior to interim period adjustments.

Under a separate agreement, KUFPEC will acquire a 30 per cent interest in the adjacent PL406 licence from Premier for a contingent consideration of $5 million. PL406 contains the Mackerel discovery and the Herring exploration prospect.

The acquisitions are subject to Norwegian government approval.  Development sanction for the area is targeted for 2014.  Premier currently estimates 2C resources covering the Bream and Mackerel accumulations of around 50 mmboe.

Simon Lockett, Chief Executive, commented:

“We are pleased to have reached agreement with BG and KUFPEC for the future of the Bream Area development.  We look forward to assuming operatorship, working with the new partnership group and defining fully the Bream Area project.”

The purchasing entity for Premier in respect of these agreements will be Premier Oil Norges AS. KUFPEC Norway AS is a subsidiary of Kuwait Foreign Petroleum Exploration Company ksc.