Page 15 - EurOil Week 39

EurOil INVESTMENT EurOil

Premier seeks second

price cut from BP

UK UK mid-sized player Premier Oil has reportedly pile of nearly $2bn. It reached an agreement with
asked for a second price cut for the North Sea creditors in late August to refinance over 45% of
Premier is seeking assets it is set to buy from BP. its debt, but it must secure creditor and share-
to sweeten the deal Premier agreed to buy BP’s Andrew Area holder approvals and make a minimum $325mn
further. and Shearwater assets in January for $625mn, equity raise in order to close the deal.
but managed to renegotiate the cash payable on Premier is asking debt holders to extend a
completion to just $210mn in June. BP will keep waiver on its borrowing terms beyond the end
$300mn of interim cash flow from oil and gas of this month, Reuters reported on September
sales under the deal revised three months ago, 25, as it looks to get at least 75% of creditors to
and will receive a further $115mn depending on back the equity raise.
future oil and gas prices. The company is also exploring alternative
Premier now wants to sweeten the deal even financing options, and confirmed on Septem-
further, though, sources told Reuters on Sep- ber 15 that it was in talks with rival Chrysaor.
tember 23. It has asked BP to lower the initial Bloomberg reported earlier that the pair were
required cash payment by $70-80mn. Both discussing an all-or-partial merger.
companies have declined to comment on the Premier’s share price has fallen dramatically
report. since the renegotiated BP deal was announced
Premier is currently working to raise $530mn in June, from GBP0.539 to GBP0.166 ($0.21) in
to fund the acquisition and restructure its debt London. ™

CNOOC eyes UK asset sale

UK CHINA’S state-owned CNOOC is reportedly (M&A) market shows signs of heating up. News
seeking a buyer for the Scott platform and associ- of CNOOC’s divestment plans comes after
Among those interested ated oilfields in the UK North Sea, Reuters cited media reports last week that ExxonMobil has
are EnQuest and a source as saying on September 24. invited companies to file bids for its UK North
Sinopec. The CNOOC-operated Scott platform started Sea oil and gas fields by October 28. EnQuest and
operations in 1993 and is used to produce oil and Sinopec are also vying for these assets, according
gas from the Scott, Telford and Rochelle fields. to Reuters and Bloomberg. Other potential suit-
The Chinese firms has stakes of 41.9%, 80.4% ors are Neo and Chrysaor, a major UK producer
and 79.3% respectively in these fields. that is understood to be discussing an all-or-par-
The Scott platform is connected with the tial merger with rival Premier Oil.
Forties oil pipeline system and the St Fergus gas Exxon’s plan to exit the UK was revealed last
terminal in Aberdeenshire. CNOOC’s partners year. It originally hoped to raise $2bn from a sale,
in the connected fields include Dana Petroleum, but this was before the coronavirus (COVID-19)
Edison, HitecVision’s Neo and Hungary’s MOL. induced oil price collapse. The UK operations
Among those interested in the assets are it intends to divest currently net the company
UK-focused independent EnQuest and Chi- around 35,000 barrels of oil equivalent per day
nese state firm Sinopec, according to Reuters. of production, and this is set to rise to 60,000
EnQuest will be able to offset future production boepd by 2023.
against past losses in order to reduce its tax base. The US major wants to withdraw from the
The sale could potentially raise several hundred European upstream industry entirely, so it can
million dollars. invest more in bigger-scale and higher-margin
The Scott platform is one of three projects elsewhere. Exxon shed its Norwegian
CNOOC-operated hubs in the UK North Sea, operations last year, through a $4.5bn sale to
the others being the Buzzard and Golden Eagle Eni’s Var Energi. It is also searching for a buyer
installations. The Chinese major entered the UK for the delayed Neptun gas project in Romania
in 2013 after buying Canadian player Nexens for where it is partnered with OMV.
$15.1bn. Exxon has a joint venture with Royal Dutch
CNOOC is preparing to bring the second Shell that runs the giant Groningen gas field in
phase of Buzzard on stream, but in August con- the Netherlands. But the Dutch government has
firmed that first oil from the project would be ordered that field to be closed within two years,
delayed until 2021. after decades of earthquakes caused by produc-
The North Sea mergers and acquisitions tion activities. ™

Week 39 01•October•2020 www. NEWSBASE .com P15