Page 14 - EurOil Week 37

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Premier confirms financing talks

with Chrysaor

UK PREMIER is in financing talks with its rival company to be in talks with another group on its
Chrysaor, potentially leading to a merger debt unless it is seeking a tie-up or an acquisition
Premier says its between two of the UK’s biggest oil and gas of assets.
preference is a deal producers. Chrysaor was founded by private equity
reached with creditors Bloomberg reported on September 15 that groups in 2007 and produces 200,000 barrels of
in late August, however. the company, saddled with just under $2bn of oil equivalent per day, having snapped up Cono-
net debt, had held initial talks with Chrysaor on coPhillips’ North Sea assets in a $2.7bn deal
an all-or-partial merger of the two businesses. last year. Premier is smaller and expects to flow
Premier has confirmed these talks, but said its between 65,000-70,000 boepd in 2020.
preference was to follow through with a prelim- Chrysaor will only make a bid for Premier if
inary deal reached with creditors in late August its debt is restructured, sources told the Financial
to refinance over 45% of its debt. Times.
Premier “confirms that it has been in dis- Creditors raised flags about Premier’s
cussions with a number of third parties, high levels of debt even before the corona-
including Chrysaor, regarding alternative virus (COVID-19) pandemic struck, after it
forms of transactions to secure the long-term announced plans to buy a raft of North Sea
refinancing of the group’s debt facilities,” it said assets in January. Premier originally planned
in a statement. But it cautioned that “to date, to acquire BP’s interests in several UK fields for
terms of the transactions discussed do not, in $625mn and acquire an extra 25% stake in the
Premier’s opinion, provide better outcomes for Tolmount gas project it operates from South
either its shareholders or creditors than those Korea’s Dana Petroleum for $246mn. However,
proposed under the heads of terms announced the Dana deal was later scuppered and the price
on August 20, 2020.” tag for the BP properties renegotiated down to
Even so, it said alternative options would only just $210mn.
“continue to be explored, in the best interests The heads of terms agreement Premier
of all of Premier’s stakeholders, but there can reached with creditors in August is subject
be no certainty that these discussions will reach to various conditions, including creditor and
agreement.” shareholder approvals and a minimum $325mn
While Premier did not say whether a merger equity raise. Proceeds from this raise will fund
was on the table with Chrysaor, it is rare for a the BP acquisition. ™

Neste sheds stake in Swedish refiner

SWEDEN FINLAND’S Neste has sold its near 50% stake May, leaving it with 15%. As the Venezuelan firm
in struggling specialist Swedish oil refiner Nynas now has only a minority stake, US sanctions no
Nynas has three to Dubai-based Bitumina, it announced on Sep- longer apply.
refineries in Sweden tember 16. PdVSA’s stake was sold to an independent
and Germany. Nynas has three refineries, in Nynashamn Swedish foundation called Nynasstiftelsen.
and Gothenburg in Sweden and Harburg in Ger- “We take great pride in having been able to
many, along with a 50% interest in the Eastham acquire the shares of Neste in Nynas, which is a
refinery in the UK, where it is partnered with natural expansion in our global industrial bitumen
Royal Dutch Shell. It produces base oils, bitumen, portfolio,” Bitumina chairman Bernd Schmidt said
process oils, transformer oils and rubber oils. in a statement. “We are certain that we can contrib-
The company is undergoing restructuring ute to the successful future of Nynas.”
after suffering several difficult years because of Bitumina is already active in Scandinavia
its former links to Venezuelan national oil com- through its Danish arm Denimotech, which
pany PdVSA. Washington imposed sanctions on supplies bitumen processing and refining
PdVSA in August 2017 as part of its maximum equipment.
pressure policy against the Maduro regime. But Nynas itself added that “the ownership
Nynas was caught in the crossfire, as the Vene- change announced today is an important step in
zuelan producer had a 50.1% stake in the group. the ongoing company reorganisation of Nynas.
Extra US sanctions introduced later pre- To successfully complete the reorganisation, dis-
vented the refiner from receiving Venezuela’s cussions continue with Nynas’ main creditors.”
heavy crude oil. The terms of the deal were not disclosed.
Under a court-supervised reorganisation, A court decision on Nynas’ reorganisation is
PdVSA also had to shed a 35% stake in Nynas in expected on September 17. ™

P14 www. NEWSBASE .com Week 37 17•September•2020