Premier selling Pakistan business to cut debt
Premier Oil, an oil company with the main focus on the UK North Sea, has agreed to sell its subsidiary in Pakistan to Al-Haj Energy Limited.
The company, working to bring online its Catcher field in the North Sea this year, is selling Premier Oil Pakistan Holdings BV, deemed a non-core asset, for $65.6 million.
Premier has received a deposit of $15 million and will get a further interim deposit of US$10 million within the next 60 days.
“The transaction is in line with Premier’s stated strategy to dispose of non-core assets and the proceeds from the sale will be used to reduce the Company’s net debt,” Premier Oil said.
The transaction is subject to receipt of customary government and regulatory approvals and is expected to complete by year-end 2017. Premier anticipates recording a book gain on disposal estimated at $40 million. Scotiabank is acting as the sole financial advisor to Premier on this transaction.
Tony Durrant, CEO, said: “We are pleased to have reached agreement to sell our Pakistan business. While now non-core for Premier, our Pakistan business has consistently outperformed our expectations over the years and this is testament to the hard work and skill of our team in Islamabad.”
In its operational update in January, Premier said that its Pakistan business, together with Mauritania, had delivered 7.9 thousand barrels of oil equivalent per day in 2016, a drop from 10.1 kpoebd in 2015 due to a natural decline in the fields there.
For comparison, the largest chunk of Premier Oil’s production comes from the UK North Sea.
Production there doubled in 2016, reaching 33 kboepd in 2016, up from 16.7 kboepd in 2015, boosted by ex-E.ON assets and the Solan offshore field.
This is expected to be boosted when Premier’s largest development, the Catcher field in the North Sea, starts producing later this year.
Pakistan sold, what’s next?
Back to the company’s portfolio management, Pakistan is not the only part of the business Premier is looking to cash in on.
In a recent operational update, Premier Oil said it was also seeking offers for its 30% interest in the Esmond Transportation System (ETS) which it acquired through its acquisition of E.ON’s UK North Sea assets. Indicative offers have been received from interested parties with the process expected to conclude during the first half of 2017, Premier said in January.
Furthermore, after receiving unsolicited offers of interest “from a number of parties,” Premier has also started a process to identify possible investors for a 20% interest in its currently operated 50% Tolmount offshore project in the UK.
Offshore Energy Today staff