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Premier Oil to sell Norwegian business for US$120mln

Published: 08:25 16 Nov 2015 GMT

Premier1
Premier said it was committed to approved North Sea projects

Premier Oil (LON:PMO) has continued its drive to stave off the worst effects of falling oil prices by selling its Norwegian business for US$120mln.

The explorer and producer said it had agreed to sell Premier Oil Norge AS (PONAS), which includes all its Norwegian assets, to Det Norske Oljeselskap ASA.

PONAS comprises the Premier-operated Vette development and adjacent Mackerel and Herring discoveries, in which it has a 50% stake.

It also includes a 50% non-operated interest in the Frøy field and seven exploration licences.

Premier said it would use the cash from the deal, which is subject to government approval and is set to complete by the end of the year, to pay down debt.

In August. Premier warned that approval of unsanctioned schemes such as Vette and Sea Lion in the Falkland Islands would depend on the oil price outlook at the time, cost savings and its ability to fund them.

But it said it remained committed to approved developments such as Solan and Catcher in the North Sea, which it said would provide underlying growth while it cuts costs to cope with lower prices.

Chief executive Tony Durrant said: "We are pleased to have reached agreement to sell our Norwegian business to Det Norske, one of our long term partners in Norway.

"Our team in Norway has done an excellent job in bringing the Vette project close to a sanction decision in a low oil price environment.

"The transaction will realise immediate value from the project as part of our strategy of active management of our portfolio."

Shares rose 3.7p to 73.15p in the first hour of London trading.

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