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Premier Oil schedules merger vote and plans name change to Harbour Energy

Merger partner Chrysaor expects full-year production of 174 kboepd and then a fall to 140-155 kboepd next year due to a maintenance catch-up

Premier Oil PLC -

Premier Oil PLC (LON:PMO) said it will be renamed Harbour Energy PLC if the merger with North Sea peer Chrysaor is approved by shareholders next month.

The oil producer, whose existing shareholders will potentially retain around 5.45% of the new company, has scheduled the shareholder vote for January 12, 2021. Premier's creditors have already confirmed their backing for the deal.

READ: Premier Oil to be transformed in private-equity backed Chrysaor merger

Premier chief executive Tony Durrant will step down from the board of directors with effect from today, the company confirmed, though he will remain in his operational role until the end of December, with finance director Richard Rose stepping in as interim CEO until completion of the proposed merger.

In a statement to the market, the company also said a Competent Person's Report from ERCE Equipoise Ltd certified that, as at the end of June, Chrysaor as a standalone company had 491mln barrels of oil equivalent (mmboe) of proven and probable reserves, with a best estimate 388 mmboe of contingent resources.

A trading update for Chrysaor was also published, showing production averaged 174,000 barrels of oil equivalent per day (kboepd) for the 11 months to the end of November, with full-year production forecast to be 174 kboepd, around the middle of its guidance range.

Chrysaor expects its 2021 production to average in the range of 140-155 kboepd, reflecting an unusually high level of asset shutdowns during 2021, driven by the deferral of maintenance in 2020 due to COVID-19, with the pandemic also hitting some drilling activities.

Premier said that when the two companies merge, “Harbour Energy will be the largest London-listed independent oil and gas company by production and reserves”.

The combined group will be cash generative and is expected to generate sufficient free cash flow to support shareholder returns, including a sustainable dividend directors plan to introduce with respect to the 2021 calendar year.

Harbour Energy’s CEO will be Linda Cook, the former Shell executive who is currently managing director of private equity group EIG, whose funds are backing the merger, with EIG CEO R. Blair Thomas the chairman designate.

Chrysaor CEO Phil Kirk will be president and CEO Europe, and a new chief financial officer will be identified prior to completion of the merger.

Quick facts: Premier Oil PLC

Price: 26.06 GBX

Market: LSE
Market Cap: £241.19 m

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