Premier snaps up E.ON's North Sea assets

Premier Oil yesterday struck a $120 million (£83m) deal to buy German energy giant E.ON's UK North Sea interests.

Premier Oil is aiming to strengthen its position in the UK

The deal covers E.ON’s equity stakes in 40 licences across the North Sea and adds around 15,000 barrels of oil equivalent per day (boepd) to Premier’s production.

Premier chief executive Tony Durrant said the move would strengthen its position in the UK.

“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,” he said.

Durrant said the firm’s current UK tax position also meant that any acquisitions are immediately value enhancing.

“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… strengthens Premier’s financial position in the current environment.”

The assets acquired include stakes in the Elgin-Franklin, Huntington, Babbage and Tolmount discoveries.

The acquisition came as Premier also announced a trading update in which it said it delivered a “robust production performance” in 2015 in line with expectations.

“This strong performance was seen across the company’s existing fields and was driven by further improvements in operating efficiency,” it said.

In October E.ON sold most of its North Sea oil and gas assets in Norway for $1.6 billion to Russian billionaire Mikhail Fridman.