* FACTBOX private equity deals in UK North Sea
* Jefferies analysts see Harbour market cap around $6 bln
(Adds detail, background)
LONDON, March 31 (Reuters) - The merger of Chrysaor and
Premier Oil is due to complete on Wednesday, creating
Harbour Energy, the UK North Sea's biggest oil and gas
producer, which will replace Premier's stock exchange listing
from Thursday, Premier said.
The reverse takeover of Chrysaor by Premier Oil, which
traces its history back to the 1930s, ushers in a new era of
private money from groups such as Chrysaor or HitecVision,
giving a new lease of life to the oil industry in the North Sea.
Oil majors have been selling assets in the North Sea, a
relatively expensive environment to extract oil, to focus
investment in more profitable fields elsewhere and their
transition to lower-carbon energy.
Premier Oil's market value on the London Stock Exchange
stood at $303 million after Tuesday's close, with shares having
risen more than 50% since the deal was announced on Oct. 6.
Premier shareholders will own around 5% of Harbour, with new
shares going to Premier creditors (18%) and Chrysaor
shareholders (77%), including private equity firm EIG and
Singapore's sovereign wealth fund GIC.
Given this increase in the number of shares, Harbour's market
capitalisation is expected to rise accordingly compared with
Premier's. Most new shares are locked in for at
least three months.
Some independent producers in the basin, one of the world's
most mature and home to the global benchmark crude grade Brent,
have been saddled with high debt after the oil price crash of
2017.
Harbour is expected to produce around 200,000-220,000
barrels of oil equivalent per day, roughly equal parts gas and
oil, and generate enough free cash flow for a dividend to be
introduced for 2021, the companies have said.
Harbour is not expected to pay taxes for around five years
due to Premier's $4 billion in so-called tax losses which can be
offset against future revenues, according to a note from
Jefferies analysts on March 18.
"Premier Oil's share count will multiply 20x but so will the
market capitalisation. We estimate a 30p/share price target for
the proposed Harbour Energy based on 25p Total net asset value
($6 billion market capitalisation)," Jefferies said.
(Reporting by Shadia Nasralla; editing by Jason Neely and
Louise Heavens)
