The Press and Journal (Inverness, Highlands, and Islands)
Premier nets £79m from sale of Norwegian business
Cash from asset sell-off will be used to manage £1.38billion debt
North Sea firm Premier Oil has boosted its balance sheet by selling its Norwegian business for £79million.
The company, which has oil and gas exploration and production interests in 12 countries, including the UK, said it would funnel the funds back into repaying debt.
Norway’s Det norske oljeselskap is acquiring Premier’s Norwegian business using existing cash and undrawn debt facilities.
The deal is subject to government approval and expected to complete by the end of the year.
It covers assets including the operated Vette development and adjacent Mackerel and Herring discoveries in which Premier has a 50% stake.
Premier, which has 26 employees in Norway, also has a non-operated 50% interest in the Froy field and seven exploration licences in the Norwegian North Sea.
Det norske chief executive Karl Johnny Hersvik said the deal, which follows hot on the heels of Trond-heim-based Det norske buy ing Svenska Petroleum’s Norwegian
(01224) 343356 subsidiary for nearly £50million, “further underlines our firm belief in and commitment to the Norwegian Continental Shelf”.
London-headquartered Premier has been forced to slash its spending by 25% this year because of lower oil prices.
But it is also eyeing North Sea bargains in a market it described just last week as “moving in our favour”.
Yesterday, Premier said the Norwegian sell-off was another step in its previously stated programme of portfolio management.
Premier chief executive Tony Durrant added: “We are pleased to have reached agreement to sell our Norwegian business to Det norske, one of our longterm partners in Norway.
“Our team in Norway has done an excellent job in bringing the Vette project close to a sanction decision in a low oil price environment.
“The transaction will realise immediate value from the project as part of our strategy of active management of our portfolio.”
Premier’s net debt at June 30 totalled £1.38billion, which it said in first ha lf resu lts was “marginally lower” than a year earlier. The figure included cash and undrawn facilities worth £987million.
“Underlines our firm belief in the Norwegian Continental Shelf”