Premier Oil has completed the previously announced sale of its stake in Babbage Area in the UK North Sea to Verus.
Premier said on Friday it had received £30.3 million ($38.7 million), after adjustments for Babbage cash flows collected by Premier since the effective date of 1 January 2018.
“The sale proceeds will be used to pay down the Company’s existing debt,” Premier said.
According to the terms of the deal, originally announced on April 30, 2018 , Verus will get a 47 percent share in the Babbage gas field, a 50 percent share in the Cobra discovery and certain outstanding exploration commitments.
The Babbage gas field is located in Block 48/2a in the UK Southern Gas Basin. Premier acquired its interest in the Babbage gas field as a result of its acquisition of E.ON’s UK North Sea assets in 2016. The Babbage gas field consists of a 9 slot minimum facilities platform with horizontal multi-fracced wells.
Gas is exported to West Sole and on to Dimlington Gas Terminal. The platform was initially manned to support well drilling, fraccing, and clean-up operations but moved to PAI (Not Permanently Attended Installation) on 5 April. According to information available on Premier Oil’s website, the field is currently producing above 3 kboepd (net) to Premier.
Premier Oil said in April the transaction value comprised $88.1 million in respect of the Babbage field interest. In addition, Verus will take on exploration commitments valued at $23.8 million resulting in net cash proceeds of around $64.3 million to Premier, before customary working capital adjustments.
Premier said further cash payments of up to $7.7 million would be due to Premier if the Cobra discovery is developed.
Additional potential payments would also be due dependent upon future specific third-party business across the Babbage infrastructure.
Production from Babbage has averaged 2.5 kboepd year to date, Premier said on Friday.
Offshore Energy Today Staff