7 Apr 2016 15:06
7 April 2016
Premier Oil plc
('Premier' or the 'Company')
Posting of Class 1 Circular, Notice of General Meeting and Update on Solan
Proposed E.ON acquisition
Further to Premier's announcements on 13 January and 1 February 2016 relating to the proposed acquisition of UK North Sea assets from E.ON (the 'Acquisition'), the Board of Premier is pleased to announce that a Class 1 Circular incorporating a Notice of General Meeting dated 7 April 2016 (the 'Circular') will be posted to shareholders today.1
As detailed in the Circular, the Acquisition constitutes a Class 1 transaction for Premier under the Listing Rules and therefore requires and is conditional upon approval by its shareholders. Accordingly, a General Meeting has been convened for this purpose and will be held at 157-197 Buckingham Palace Road, London, SW1W 9SP on Monday 25 April 2016 at 10.00am.
As set out in the Circular, Premier's lending banks and US private placement noteholders have now provided the consents and waivers required in connection with the Acquisition and the Secretary of State has provided confirmation that the Acquisition will not result in the revocation of petroleum exploration and/or production licences or require any further change of control.
The Directors of Premier believe that the key benefits of the Acquisition are:
· | Addition of a quality asset base to the Premier's existing UK North Sea business; |
· | Potential to generate operating and cost synergies across Premier's combined UK North Sea business; |
· | A compelling acquisition valuation that is immediately value enhancing; and |
· | Provision of significant financial benefits to Premier within strict acquisition criteria. |
The Circular contains Competent Persons' Reports on the reserves to be acquired as part of the Acquisition. The Acquisition values the assets at $1.6/boe based on the 2P reserves estimated by the Competent Persons and is highly attractive when comparing the purchase price of $120 million to the net asset value of 2P reserves and Southern North Sea infrastructure of $494 million (pre-tax). The Acquisition will allow Premier to create value for shareholders through accelerating the utilisation of some of its existing tax loss position of approximately $3.5 billion.
The key findings of the Competent Persons Reports are summarised as follows:
| Proven and probable 2P reserves (mmboe) | Pre-tax NPV($mm) |
Central North Sea | 39 | 467 |
Southern North Sea reserves and infrastructure | 36 | 27 |
Total | 75 | 494 |
The Circular is now available on Premier's website at www.premier-oil.com under the Investors, General Meetings section. The Circular is available for inspection at Premier's registered office and has also been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do.
Update on Solan
On Solan, West of Shetland, the required platform production systems have been commissioned. The operations team has commenced the start-up procedures and first oil from the field is imminent.
For further information please contact:
Enquiries
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Premier Oil plc | Tel: 020 7730 1111 |
Tony Durrant, Chief Executive |
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Richard Rose, Finance Director
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Bell Pottinger | Tel: 020 3772 2570 |
Gavin Davis |
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Henry Lerwill |
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[1]Shareholders who have consented to receive communications by electronic means will receive hard copies of the Letter of Availability (detailing where the circular can be viewed online) and form of proxy only. Shareholders who have requested to receive all communications by email will receive an email including a website link to the circular and details regarding voting online. The full circular is available on Premier's website at www.premier-oil.com