British oil and gas firm Premier Oil has signed sale and purchase agreements (SPAs) for acquiring BP’s interests in the Andrew Area and its Shearwater assets.
Last month, Premier Oil and BP agreed revised terms over the latter’s sale of a series of North Sea assets, ending a dispute Premier’s largest creditor Asia Research Capital Management (ARCM).
The latest move follows Premier Oil’s creditors’ approval for the acquisition of BP’s interests in the producing Andrew Area and Shearwater fields in the UK North Sea under amended terms.
Premier expects to conclude the acquisitions by the end of September this year after raising the funds through an equity raise.
Premier Oil CEO Tony Durrant said: “The signing of the SPAs with BP is another important milestone in completing the value-accretive BP Acquisitions which consolidates the group’s position in the UK North Sea, one of our core areas while, at the same time, accelerates the deleveraging of our balance sheet.”
The deal will see Premier paying BP $210m and reduces Premier’s liability for field abandonment to approximately $240m from $600m.
Furthermore, BP would be entitled to receive an additional $115m based on higher future oil and gas prices.
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.