Premier Oil sells Norwegian arm for $120m

North Sea producer Premier Oil has struck a deal to sell its Norwegian business for $120 million (£79m) in cash.

Premier Oil has agreed to sell its Norwegian arm to Det Norske

The FTSE 250 firm, which has been operating in Norway since 2005, said the proceeds from the sale to Det Norske would be used to pay down its debt.

Subject to government approval, the deal is expected to complete by the end of this year.

Premier Oil chief executive Tony Durrant said: “We are pleased to have reached agreement to sell our Norwegian business to Det Norske, one of our long-term partners in Norway.

“Our team in Norway has done an excellent job in bringing the Vette project close to a sanction decision in a low oil price environment. The transaction will realise immediate value from the project as part of our strategy of active management of our portfolio.”

The business being sold comprise Premier’s 50 per cent interests in its operated Vette development and adjacent Mackerel and Herring discoveries, along with its 50 per cent non-operated stake in the Frøy field and seven exploration licences.

As at 30 June, the firm’s Norwegian business had net assets of $146.3m and generated an operating loss of $17.4m in 2014.