30th Apr 2018 10:33
LONDON (Alliance News) - Premier Oil PLC on Monday said that it agreed to sell its interest in the Babbage area to Verus Petroleum SNS Ltd.
The oil company said the disposal includes its 47% holding in the Babbage gas field and a 50% stake in the Cobra discovery, both in the southern North Sea.
Premier said it expects to record a book gain on disposal at over USD70.0 million and use funds to pay down its existing debt. The completion of a transaction is estimated in the second half.
The transaction value comprises GBP62.9 million, or USD88.1 million, in respect of the Babbage field interest, including exploration commitments valued at GBP17.0 million, or USD23.8 million.
The company said that will result in GBP45.9 million, or USD64.3 million, in cash to Premier, before working capital adjustments. It expects to receive further a USD5.5 million, or USD7.7 million, in cash if the Cobra discovery is developed.
"The sale of our interests in the Babbage area will immediately reduce our net debt and our committed exploration spend in 2019," said Chief Executive Tony Durrant. "This transaction further demonstrates our determination to restore our balance sheet strength."
The stock was trading 2.0% lower at 93.55 pence per share on Monday.
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