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Premier Oil to buy E.ON’s North Sea oil fields for $120 million

UK oil company Premier Oil is set to acquire E.ON UK’s oil fields in the the North Sea. The $120 million worth assets are located in the central North Sea, West of Shetlands.

Acquired assets by Premier Oil include a 5% share in Elgin-Franklin field operated  by Total, 100% acquisition of Huntington oil field, operatorship with a 47% stake in Babbage oil field and a 50% stake in Tolmount oil field. 

Mr. Tony Durrant, Chief Executive at Premier Oil said “We are pleased to have agreed this value accretive deal as we continue to execute our strategy of focusing the portfolio on our core regions. Having recently completed the sale of our Norwegian assets for $120 million, this transaction allows us to further consolidate our interests in the UK North Sea where any acquisitions are immediately value enhancing as a result of our existing UK tax position."

Premier has historically been able to capture long term value through acquisitions in low oil price environments. The material increase in low cost production and cash flow generation in 2016 and 2017, is materially covenant accretive and strengthens Premier’s financial position in the current environment,” he added. 

Mr. Michael Sen, Chief Financial Officer at E.ON said "This transaction further strengthens our financial profile and provides flexibility to implement our strategy and to reposition the group. The outcome demonstrates that E.On E&P is a high-performing business with a strong asset base and superbly professional employees.”

"Premier has a long history in the UK and I am convinced that the company will continue to build on this success story in the future," he added. 

It is estimated that this deal would add up to 15,000 barrels of oil equivalent per day to Premier's production in 2016.