Harbour Energy Share Discussion Threads

[oilretire] 05/6/2020 15:49

BP keeping all SWR decom costs -

In addition, BP would retain 100 per cent of the existing Shearwater abandonment costs and 50 per cent of the existing Andrew Area abandonment costs.

[lostit] 05/6/2020 14:49

Reading the press release the main change is they only have to pay $115mm if commodity prices rise as BP are keeping the $300mm cash generated since the Effective date. Also significant reduction in Decom costs for Andrew but not shearwater. Although 50 - 75% of that would be picked up by HMRC anyway. ARCM are using the new shares to help close out the short. On balance this will be a better deal for PMO if the Oil price rises than the previous one. As always DYOR.

[grupo guitarlumber] 05/6/2020 14:43

BP Agrees Amended Terms for North Sea Assets Sale with Premier Oil -- Update
Print
Alert

-BP's North Sea assets sale to Premier Oil amended to reflect lower commodity prices

-Premier Oil says assets are cash generative even under current conditions

-Premier's largest creditor agrees to withdraw appeal against debt plan and support the acquisition



By Jaime Llinares Taboada



BP PLC has agreed to revise the terms of a sale of North Sea assets to Premier Oil PLC following the plunge in oil-and-gas prices this year.

Under the new deal Premier will pay BP $210 million upon completion with a further $115 million based on future oil-and-gas prices, instead of the one-time payment of $325 million previously agreed.

BP will also retain $300 million in interim cash flows, keeping the potential total value of the deal at $625 million as agreed in January.

The deal was also changed to reduce Premier's field abandonment expenses to $240 million from $600 million.

The changes were supported by Premier's largest creditor Asia Research Capital Management which has agreed to invest in the business. ARCM will be issued with 82.4 million Premier shares at 26.69 pence each and the money raised will part-fund the acquisition and ongoing capital investments.

ARCM will use the shares to reduce the short-selling position it had built up of 16.69% in Premier and has agreed to withdraw its appeal against the group's credit schemes.

Premier Oil said the terms were changed due to "material developments in global commodity markets". Near term WTI and Brent contracts for crude oil are down nearly 40% since 2020 began.

It added that the revised terms agreed with BP are in principle and there's no certainty any deal will take place. The assets being bought--Andrew Area and Shearwater--are immediately cash generative even at current commodity prices, Premier said.

In addition, Premier Oil said it is discussing with a subset of creditors to waive financial covenants through September 30 and to provide continued access to revolving credit facilities.

Shares of Premier Oil at 1332 GMT were up 21% at 38.44 pence. BP was up 6.1% at 356.60 pence, with energy stocks gaining on hopes of an international agreement to extend oil-production cuts.



Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT



(END) Dow Jones Newswires

June 05, 2020 10:23 ET (14:23 GMT)

[rose_by_another_name] 05/6/2020 13:43

I got out at 37. Made some money, you guys
can have the rest. Good luck.

[whites123] 05/6/2020 13:42

Andy from PMO is pretty pathetic and doesn't understand basic mathematics.
His scenario is all clear cut when things are equal but in fact his "Mr Hedges" still has 6% of the enlarged capital short which he has to close..

Now he suggests that having been caught out acting FRAUDULENTLY, and now being given a sweetener that in time they will come back for a second pop.

Basic mathematics clearly not the advocate of fraud supporter forte is it.

Climb under your rock Andy. You really are a disgusting piece of work.

Lies lies and more lies from you whilst you support criminal activity.

[boatman123] 05/6/2020 13:30

Pushing hard , will we crack 40 today ? Or Monday ? Come on you little beauty !

[onedb1] 05/6/2020 13:22

Personal target gap close to 60. More or less doubling my re-entry . Let's see .

[johnrxx99] 05/6/2020 13:03

Move on you guys. A deal is a deal and be glad you didn't have to do it :-)

[hotchillideals] 05/6/2020 12:28

https://www.telegraph.co.uk/business/2020/06/05/price-slashed-premier-oils-bp-deal/#commentBP slashes price of Premier Oil dealPremier will now pay only $210m to BP on completion of the deal, as opposed to the $600m originally agreed upon in JanuaryByEd Clowes5 June 2020 • 10:18amBP has slashed the price of its deal with Premier Oil to sell the company oil and gas fields in the North Sea, after the price of crude collapsed by more than half in fewer than three months.Under the new terms announced on Friday, Premier will now pay only $210m to BP on completion of the deal, as opposed to the $600m originally agreed upon in January.The Telegraph first reported in early May that Premier was preparing to restructure its deal with BP in light of plummeting oil prices.As part of the abridged terms, BP will hold on to $300m of cash flows from the fields for a period of time, while the estimated revised abandonment obligations have been reduced to $240m from $600m.Crucially, the new deal puts to bed Premier's long running feud with key backer ARCM, the Hong Kong-based hedge fund that had moved to block the acquisition.ARCM, a major investor in Premier's debt, has also built up a huge bet against the company's shares, which have fallen by 65pc since the start of the year.BP and Premier Oil: Slippery slopeFrom 3 Jan to 5 June 10:14:18FebMarAprMayJune-80.0%-60.0%-40.0%-20.0%0.0%20%? Premier Oil PLC: 101.2 ? 35.50-64.9%? BP PLC: 485.6 ? 349.8-28.0%More share information on Premier's takeover of the BP North Sea oilfields is at the centre of a complicated restructuring of around $2bn (£1.6bn) of borrowing. ARCM has argued that Mr Durrant is overpaying for the assets and has opposed the deal and restructuring.But now, as part of the new deal, ARCM has agreed to withdraw its legal challenge against the takeover, and has pledged to support the BP acquisitions.This truce between the pair will entail Premier issuing 82.2 million new shares, representing 8.91pc of the enlarged company, to ARCM at a price of 26.69p per share, the proceeds from which will be used to fund part of the proposed BP acquisitions.

[andypop1] 05/6/2020 12:22

Steve,
That was a simple explanation of the short, as you know Mr Hedge also owns some debt that will increase in value if and when the company becomes more viable.

[oilretire] 05/6/2020 12:19

Exactly what it says in the RNS

ARCM will use the new shares to reduce its current short position (latest reported being 16.69 per cent).

[steve73] 05/6/2020 12:16

Nice explanation andy, although in our case Mr Hedge borrowed c. 160m and so still has 60m to return to Mr Sacks at some point, and if he tries to buy this volume on the open market, the price will undoubtedly rise - perhaps to even more than the £1 he sold them for originally....

We (or some of us) can certainly hope, and until Covid raised it's head in Feb, it was looking likely. If the OP keeps rising as it is, it is again distinctly possible.

[wageslave] 05/6/2020 12:10

I get you now, so the new shares will be returned to whoever they have been loaned from and will effectively cancel or reduce a proportion of the short.

[andypop1] 05/6/2020 12:05

Wage,
A quick explanation with made up prices and names:
Mr Hedge borrows 100m shares off Mr Sacks when the share price is £1, he then sells all the shares on the open market to the likes of Mr White and others. Those shares are now in general circulation and Mr White thinks he's got a bargain.
Mr Hedge needs to give 100m shares back to Mr Sacks at some point in the future, he can either buy them back on the open market or get pugmier oil in a position where they have no choice but to offer Mr Hedge some sweeteners to agree to extending their debt, given pugmier oils previous Mr Hedge takes that option.
Pugmier sells Mr Hedge 100m shares for 25p, Mr Hedge gives those shares back to Mr Sacks and pockets 75p for each share less costs and Mr White claims foul play as he is underwater.
Hope that helps.

[wageslave] 05/6/2020 12:01

So you are saying the new shares effectively dilute the short through increased numbers, but don't actually cancel it out?

[steve73] 05/6/2020 11:51

At today's m-cap (now effectively c. 330MM incl. the additional shares, or $415MM) the balance of the acquisition of $180MM would entail c. 45% further dilution.

Alternatively, the additional cost would represent less than 10% in additional debt... and it's well within the existing headroom.

Without working through all the if & buts, I know which way I (as a shareholder) would rather see.

[heialex1] 05/6/2020 11:49

Fair point. If oil stabilises between $40 and $50 PMO should move towards 60p pretty swiftly

[wageslave] 05/6/2020 11:45

Interested to know how can the new shares can be used to reduce the short as they exist independently of the shorted shares?

[andypop1] 05/6/2020 11:19

Steve,
The 6% hedge will be enough for now, they will be free to increase it should they see fit once the transaction has completed.
The acquisition will be funded through equity, what is not clear is whether that will be through a placing, a RI or a mix of both. There was no mention of a broker willing to underwrite the cash raise so some more clarity is required there. Let's hope special resolution 19 doesn't come into play. Either way shareholder approval is needed.
With ARCM on board the debt maturities should be extended but it will need a new scheme to become effective, it sounds like talks with other lenders are in the early stages.
The Tolmount acquisition is unclear, so again more detail is needed on that.

Good luck.

[steve73] 05/6/2020 10:53

Thanks or - I'm pleased to see that T'mt is not included. (Gas prices & futures are well below what we would have planned the development for... and also the current hedges in place).

ARCM have probably been left with just enough shorts to offset their debts.. Perhaps our resident ARCM "supporter" could advise...??

2 things still outstanding though.
1. How will the balance of the deal be funded? (I still think there'll be sufficient freecash & Debt headroom to allow this - esp if the O/P keeps rising.)
2. Will the existing debt maturities be extended & terms revised? (i.e. IR sweeteners)

[oilretire] 05/6/2020 10:25

Picked up from the SQZ thread

Way down in the footers of the RNS is this

Premier will subsequently register the Schemes but the BP Acquisitions and the acquisition of the additional interest in Tolmount will not proceed on the terms originally envisaged, which in turn means the original amendment and extension of the Group's credit facilities contemplated under the Schemes will not take effect.


So either walking away from the extra 25% deal or being renegotiated.

[whites123] 05/6/2020 10:18

andypop15 Jun '20 - 11:09 - 50191 of 50192

You really are a nasty piece of work arent you.

You now try and promote 6% of the enlarged share capital as "Nothing".
You seem to think that FRAUD is good.
You try desperately to promote the deal as good now, despite for months suggesting it was the death nail.
You now try and suggest that others will use PMO as a plaything..
Why?
ARCM were thrown a lifeline... PMO offered that out.
ARCM still have 6% of the ENLARGED capital to close out..
I assume you understand that?
I will make allowances for your lack of comprehension of basic mathematics skills.

There is still a rock there for you to climb under.
What a truly despicable piece of work you are.
Applauding FRAUD the way you do.