Premier Oil and BP have agreed revised terms over the latter’s sale of a series of North Sea assets, ending a dispute with its largest creditor Asia Research Capital Management (ARCM).
In January this year, BP signed an agreement to sell its interests in the Andrew area in the central UK North Sea and its non-operating interest in the Shell-operated Shearwater field to Premier Oil for $625m.
When the deal was first announced, ARCM argued that Premier Oil should focus on cutting its debts, rather than making acquisitions and said it will ‘vigorously contest’ the acquisition.
ARCM owns about 15% of Premier’s debt.
After the amendment of the deal terms, ARCM has agreed to drop its appeal against a court scheme to facilitate Premier buying the BP’s assets.
The deal will see Premier paying BP a sum of $210m and reduces Premier’s liability for field abandonment to approximately $240m from $600m.
Premier Oil CEO Tony Durrant said: “We are pleased to have agreed revised terms with BP for the proposed acquisition of the Andrew Area and Shearwater assets, which are materially value accretive for the Company.
“The Stable Platform Agreement, once agreed with and approved by lenders, will provide a basis for the Company to continue discussions regarding proposed amendments to the Group’s existing credit facilities.”
The Andrew assets operated by BP comprise the Andrew platform, and Andrew (with 62.75% stake), Arundel (with 100% interest), Cyrus (100% stake), Farragon (50% stake) and Kinnoull (77.06% interest) fields. All these fields are located about 140 miles north-east of Aberdeen.
Last year, the average daily production from the Andrew platform was between around 25,000 barrels of oil equivalent per day (boepd) and 30,000boepd.
BP holds a 27.5% interest in the Shearwater field. The field produced around 14,000boepd gross in 2019.