Premier Oil weighs cash call for Chevron North Sea fields

The Daily Telegraph - Business - - Business - By Jil­lian Am­brose

PREMIER OIL is con­sid­er­ing a gi­ant cash call to fund its bid for a pack­age of oil and gas fields be­ing sold by US ma­jor Chevron.

The com­pany as­sured in­vestors last week that it plans to keep a tight rein on spend­ing as it drives its debts down. But ac­cord­ing to The Sun­day Times, it plans to turn to its share­hold­ers for the $1.5bn deal.

In­dus­try sources close to the deal con­firmed that a rights is­sue or a share plac­ing is one of the op­tions Premier is con­sid­er­ing.

Oth­ers in­clude bring­ing in a project part­ner to help fi­nance the bulk ac­qui­si­tion while Premier runs the fields as an op­er­a­tor. The com­pany de­clined to com­ment.

Chief ex­ec­u­tive Tony Dur­rant told The Daily Tele­graph last week that it is keep­ing an eye on deal ac­tiv­ity in the North Sea basin as part of its “nor­mal course of busi­ness”, but is fo­cused on re­duc­ing its debt pile.

Premier is un­der pres­sure to bal­ance the need to chip away at its £2.3bn debt with the chance to earn up to £4bn tax free in the UK North Sea. . The debtwracked oil firm is one of four vy­ing for the North Sea fields in Chevron’s first sales round against well-funded ri­vals in­clud­ing pri­vate eq­uity-backed Chrysaor, chem­i­cals gian Ineos and Is­raeli con­glom­er­ate Delek.

All three of the com­pa­nies are on the hunt for fur­ther North Sea as­sets after tak­ing ma­jor stakes in re­cent years. Delek snapped up North Sea pro­ducer Ithaca al­most two years ago and Chrysaor paid around $3.8bn for Shell’s as­sets around six months later.

The four-horse race could re­duce to three this week as Ineos, owned by bil­lion­aire in­dus­tri­al­ist Jim Ratcliffe, inches to­wards a sep­a­rate North Sea sales deal with Cono­coPhillips al­most two years since talks first be­gan.

Ineos is un­der­stood to have con­sid­ered the Chevron deal a “back­stop op­tion” in case the pro­tracted talks with Conoco fell apart.

Ineos paid £300m for the ex­clu­sive right to sales talks with Chevron un­til Dec 15.

The dead­line has since been ex­tended to to­mor­row as the pair strug­gle to agree on the price of the deal amid oil price volatil­ity.

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