ADVFN Morning London Market Report: Tuesday 12 September 2017

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Premier Oil agrees $200m sale of Wytch Farm stake to Verus


Premier Oil has agreed to sell its entire 33.8% stake in the Wytch Farm oilfield to Verus Petroleum SNS for a cash consideration of $200m.
The cash consideration will be payable on completion and Premier will also be able to release around $75m in letters of credit related to future decommissioning liabilities that are now being transferred to Verus.

Premier said the disposal is in the best long-term interest of the company and its stakeholders and represents “an excellent opportunity to realise an attractive valuation well in excess of the implied valuation from the most recent transaction in Wytch Farm”.

Proceeds from the disposal will be used to pay down Premier’s existing debt.

Chief executive Tony Durrant said: “The disposal will allow for a significant reduction in Premier’s net debt and generates material value for shareholders. This is the latest in a series of disposals in line with Premier’s strategy of realising value for shareholders at the appropriate stage of an asset’s life cycle and at an attractive valuation.”

Wytch Farm is a large onshore oil field although a significant area extends offshore. The field has been developed with 11 well sites linked to a central onshore gathering station and is operated by Perenco UK Limited. Production is exported via pipeline to the Hamble terminal near Southampton for tanker loading.

At 0930 BST, the shares were up 1.7% to 58.62p.

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