Premier and Harbour today announced that they have reached agreement with Harbour’s UK operating company Chrysaor, regarding a proposed all share merger between Premier and Chrysaor and the reorganisation of Premier’s existing debt and cross-currency swaps.
The Transaction will create the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250 kboepd and combined 2P reserves of 717 mmboe as at 31 December 2019.
In the UKCS, Chrysaor produces ~200 mboe/day and operates 14 fields across several hub facilities including Armada, Everest, Lomond, Greater Britannia, J-Area and the East Irish Sea. The company also holds 11 licences across 18 blocks in Norway where it continues to pursue exploration opportunities.
Premier’s UK portfolio averaged 54.2 kboepd during 2019, underpinned by production from their flagship Catcher development and a series of smaller stakes in other fields such as Elgin-Franklin and Glenelg. Premier’s operated Tolmount gas field in the Southern North Sea, which was sanctioned in August 2018, is scheduled for first gas in Q2 2021.
The Transaction is expected to result in Premier’s stakeholders owning up to 23 per cent of the Combined Group and Harbour and other Chrysaor shareholders owning at least 77 per cent.
The Combined Group’s Board of directors will comprise 11 directors including six independent non-executive directors and three executive directors including Linda Z. Cook (currently CEO of Harbour) who will be CEO of the Combined Group and Phil Kirk (currently CEO of Chrysaor) who will be President of the Combined Group and CEO Europe; the two other non-executive directors will be appointed by Harbour.
The Transaction is subject to regulatory approvals and approval by Premier’s shareholders and the Existing Creditors.
Tony Durrant, CEO of Premier, commented:
“There is significant industrial, commercial and financial logic to creating an independent oil and gas company of this size with a leading position in the UK North Sea. The transaction will also provide the Combined Group with a solid foundation from which to pursue a fully funded international growth strategy.”
Linda Cook, CEO of Harbour, commented:
“This transaction is the next step in Harbour’s aspiration to develop a new independent E&P company with global relevance. It significantly advances our leading position in the North Sea, where we will continue to re-invest, and expands our geographic footprint to Asia and Latin America. We are excited by the Premier assets in these regions and view them as the foundations upon which to build material portfolios and further diversify the company.”
Phil Kirk, CEO of Chrysaor, commented:
“Through this deal we will become the UK’s largest London-listed independent E&P, by all key metrics. With our combined organisation and operatorship of a large part of our now international portfolio, we will have the ability to deliver value safely, and play our part in the energy transition.”