Premier Sells ETS Pipeline Stake to CATS Management
- Business & Finance
Premier Oil has entered into a sale and purchase agreement to sell its entire equity interest in the Esmond Transportation System (ETS) pipeline to CATS Management (an Antin Infrastructure Partners portfolio company).
Under the agreement, Premier will receive cash consideration of up to £23.6 million ($31.6 million) for its entire 30 per cent interest in ETS.
The consideration consists of an initial upfront payment of £21.0 million ($28.1 million) (subject to certain customary financial adjustments) payable on completion, plus a future potential payment of up to £2.6 million ($3.5 million) linked to the achievement of certain key milestones in respect of any future development of the Pegasus field. Disposal proceeds will be used to pay down Premier’s existing debt.
The ETS pipeline was constructed in order to transport gas from Esmond Area fields to the Bacton gas terminal on the North Sea Coast in North Norfolk. The pipeline is currently operated by Perenco UK as operator of the Trent and Tyne fields, and is used as the export route for the Cygnus gas field recently brought on stream by ENGIE.
Premier expects the sale to complete in 1H 2018.
Jefferies International Limited acted as financial advisor to Premier, together with Centrica plc and Perenco UK Limited who have also entered into separate SPAs, to sell their respective interests in the ETS pipeline to CATS Management.
Tony Durrant, chief executive, said: “The sale of the ETS pipeline interest is another step in realising value from the E.ON UK portfolio acquired by Premier for $120 million in 2016. The ETS pipeline does not serve any fields owned by Premier and is therefore non-core to the group.”