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* Premier to buy BP assets, increase Tolmount stake
* Plans $500 mln rights issue
* Sees FCF of $1 bln from acquisitions to end 2023
* Extends debt maturity to 2023
* Premier, Rockhopper find partner for Sea Lion project
(Adds CEO, debt holder ARCM, analyst)
By Shadia Nasralla
LONDON, Jan 7 (Reuters) - Premier Oil is set to buy
stakes in North Sea oilfields Andrew and Shearwater from BP
for $625 million and increase its stake in the Tolmount
gas project in a deal with Dana worth $191 million, it said on
Tuesday.
Premier said the acquisitions would generate more than $1
billion in free cash flow by the end of 2023, push its output
above 100,000 barrels of oil equivalent per day by next year and
add 82 million barrels of reserves and resources to its
portfolio.
The acquisitions are funded by a $500 million equity raise
"which has been fully underwritten on a standby basis", existing
cash and, if needed, a loan of $300 million. Premier's shares
shot up around 11% to their highest in over a year by 0814 GMT.
Chief Executive Tony Durrant told Reuters the response from
major shareholders for the plans was "extremely positive". The
group added it expected to confirm the structure of the issue in
the first quarter.
It also said it had extended its debt maturity timeline by
over two years to the end of November 2023. Premier, which had a
market capitalisation of around $1.1 billion before the
announcements, has a debt pile of around $2 billion.
Hedge fund ARCM, which has had a growing short position in
Premier shares since 2017 reaching around 17% of the oil group's
stock, around four times higher than the average for
London-listed firms, objected to the plans.
ARCM, describing itself as Premier's largest creditor at 15%
of its debt instruments, said it would "take all steps" to
oppose the deals, objecting to Premier's focus on North Sea gas
assets amid strong Russian and U.S. gas imports.
In a string of announcements on Tuesday, Premier's partner
in the Sea Lion project off the Falklands Islands, Rockhopper
, said they had signed a preliminary deal for Navitas
Petroleum LP to buy a 30% stake.
The new partnership will reduce Premier's obligations to
build Sea Lion to around $285 million from $500 million, Durrant
said.
"Today's announcements have the potential to transform it
into one of the more investible names in the space," said BMO
analyst David Round.
"Not only will these deals add scale and growth, but
importantly Premier's deleveraging will accelerate towards much
more manageable levels."
(Reporting by Shadia Nasralla; editing by Jason Neely)
