Premier Oil, an independent exploration and production company, has completed the sale of Premier Oil Norge AS, which comprises all its Norwegian assets, to Det norske oljeselskap ASA for a net cash consideration of $120 million.
Premier said in November, when the deal was made, that the proceeds from the deal would be used to pay down its debt and represented another step in its program of portfolio management.
According to the company, its net debt is expected to be just under $2.3 billion at year end as a result of this transaction.
“Premier continues to enjoy significant liquidity with $1.2 billion of cash and undrawn credit facilities and covenant headroom is expected to be in excess of $800 million at the year end,” the company said on Wednesday.
Premier’s Norwegian assets comprises the operated Vette development and adjacent Mackerel and Herring discoveries (50 percent interest), a non-operated interest in the Frøy field (50 percent interest) and seven exploration licenses in the North Sea. Premier has 26 employees in Norway.
Premier also reported on Wednesday that progress has been made on the Solan field on the commissioning of the offshore installation systems required for first oil.
According to the company, tanker trials have been completed and commissioning work has continued using the Superior flotel. The timing of the start‑up of first oil is dependent on weather conditions; after a favourable weather period for much of September and October, the West of Shetlands area experienced an unprecedented number of different storm fronts during November and early December, said the company. This resulted in poor bridge connectivity between the flotel and the Solan platform and a number of lost days, Premier further added.
“We are continuing to reduce the number of hours required to reach first oil, however we now expect first oil to be in January,” the company explained.
Falkland Island drilling
Drilling operations in the Isobel-Elaine area of the North Falklands basin are ongoing and the Isobel Deep re-drill well is drilling ahead with results expected early in the New Year, Premier concluded.