Premier Oil, an independent exploration and production company, has agreed to sell Premier Oil Norge AS (PONAS) which comprises all its Norwegian assets, to Det norske oljeselskap ASA for a cash consideration of $120 million.
According to the company’s press release on Monday, the proceeds will be used to pay down its debt and represents another step in Premier’s programme of portfolio management.
PONAS comprises the Premier-operated Vette development and adjacent Mackerel and Herring discoveries (50% interest), a non-operated interest in the Frøy field (50% interest) and seven exploration licences in the North Sea. PONAS has 26 employees in Norway.
According to Det norske, at the end of 2015, PONAS is estimated to hold tax losses carry forward, undepreciated tax balances and exploration tax refunds equaling approximately NOK 1 billion ($115 million).
Premier said that the transaction was subject to the receipt of government approval and was expected to complete by year-end.
Tony Durrant, Chief Executive, commented: “We are pleased to have reached agreement to sell our Norwegian business to Det norske, one of our long term partners in Norway. Our team in Norway has done an excellent job in bringing the Vette project close to a sanction decision in a low oil price environment.
“The transaction will realise immediate value from the project as part of our strategy of active management of our portfolio.”
Karl Johnny Hersvik, CEO of Det norske, said: “Following the recent closing of the Svenska transaction, the acquisition of PONAS is another bolt-on acquisition that further underlines our firm belief in and commitment to the Norwegian Continental Shelf.”