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| Premier Oil Norwegian operation Source: Premier Oil |
The transaction is expected to close before year end and proceeds
will be used pay down debt. The exit of the business will give rise to a G&A
saving of c.USD20 million p.a. as well as remove capital requirements for the Vette
development that was progressing towards sanction.
For Premier Oil, the sale is in line with the company’s ongoing
portfolio management strategy and is an important step to managing the high
debt levels.
For Det Norske, the acquired business will bolster its
Norwegian portfolio and Det Norske will be able to offset its production
against the tax losses in Premier Oil Norges (from spend on Vette and Froy)
which stood at USD146 million as at mid-2015. Det Norske will fund the
acquisition from internal cash resources.
Tony Durrant, CEO of Premier Oil commented:
“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.”
Karl Johnny Hersvik, CEO of Det Norske commented:
“Following the recent closing of the Svenska transaction, the
acquisition of Premier is another bolt-on acquisition that further underlines
our firm belief in and commitment to the Norwegian Continental Shelf.
