Premier Oil’s creditors have approved the company’s acquisition of BP’s interests in the producing Andrew Area and Shearwater fields in the UK North Sea under amended terms.
The transaction, however, remains conditional on finalisation of the sale and purchase agreement (SPA), refinancing of Premier’s existing credit facilities and equity funding, as well as other approvals.
In a press statement, Premier Oil said: “Premier also has the support from a subset of its creditors on the terms of the ‘Stable Platform Agreement’ to waive the company’s financial covenants through to 30 September 2020.
“This has been put to the creditor group for their formal approval by 8 July 2020. Under its current financing arrangements, Premier is required to provide a covenant compliance certificate to its lenders within 90 days of 30 June.”
Last month, Premier Oil and BP 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, 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 Andrew assets operated by BP comprise the Andrew platform, and Andrew (with a 62.75% stake), Arundel (100%), Cyrus (100%), Farragon (50%) and Kinnoull (77.06%) fields. All these fields are located 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 (boe/d) and 30,000boe/d.
BP holds a 27.5% interest in the Shearwater field, which produced around 14,000boe/d gross last year.
Separately, Premier Oil noted that it scrapped a £152m ($191m) deal to acquire an additional 25% stake in the Tolmount project from Dana Petroleum.