Premier Oil has signed an agreement to divest its entire 33.8% interest in the Wytch Farm field, located in Dorset, UK, to Verus Petroleum SNS for $200m.
Under the agreement, Premier will also be able to release around $75m worth of letters of credit linked to future decommissioning liabilities, to be inherited by Verus.
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The sale comprises Licences PL089 and P534 in the Wytch Farm, an onshore oil field that has been producing since 1979.
Premier Oil 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 lifecycle and at an attractive valuation."
The transaction is consistent with the company’s strategy of realising value at the appropriate stage of an asset's lifecycle through portfolio management.
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By GlobalDataAs of 31 December last year, the project was estimated to have 2P reserves of around 14.91mmboe, while production, net to Premier's working interest, averaged 5.11boepd in the first six months of this year.
The proceeds from the sale are expected to improve the company’s balance sheet.
The field is operated by Perenco UK and has been developed with 11 well sites linked to a central onshore gathering station.
