Premier Oil Plc will be acquired by Chrysaor Holdings Ltd. in a reverse takeover, creating the largest listed independent oil and gas producer in the UK North Sea.
The deal marks the end of the road for one of the oldest independent oil explorers. After years laboring under a mountain of debt Premier has finally bowed to pressure from creditors, with CEO Tony Durrant abandoning his plan to acquire some of BP’s North Sea assets and agreeing to step down.
The transaction will create a stronger company, pumping more than 250,000 barrels of oil equivalent day. Yet Premier’s current shareholders will end up with just a sliver of the combined group — no more than 5.45%, while Chrysaor’s backers will get at least 77% and Premier’s other stakeholders the rest.
After “years trying to recover Premier from its debts and set the company back toward growth,” the company had few other options, Arden Partners Ltd analyst Daniel Slater said in a note. Recommending the merger is a decision “we don’t believe it would have done lightly.”
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Source: Bloomberg via World Oil
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