(Alliance News) - Premier Oil PLC on Monday said it signed the agreements for the acquisition of BP PLC's Andrew Area and Shearwater assets following the receipt of creditor approval.
The upstream oil and gas company's acquisition is still conditional upon the agreement of the terms of the refinancing of its credit facilities and equity funding.
Premier is to pay USD210 million to BP for the assets, with up to USD115 million more to be paid depending on higher future oil and gas prices.
Premier plans to fund the amount through an equity raise.
The company aims to complete the acquisition by the end of September.
BP is to retain 100% of the abandonment costs for Shearwater and 50% of the abandonment costs for Andrew Area, with extra costs estimated at USD240 million to be taken on by Premier.
BP shares were down 2.0% at 303.20 pence on Monday morning in London.
Both assets are immediately cash generative and will accelerate the use of Premier's USD4.1 billion of UK tax losses, Premier said.
Premier's Chief Executive said: "The signing of the sale and purchase agreements with BP is another important milestone in completing the value-accretive BP acquisitions which consolidates the group's position in the UK North Sea, one of our core areas, while, at the same time, accelerates the deleveraging of our balance sheet."
Premier's shares were down 3.3% at 40.36 pence each on Monday morning in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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