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Home » Companies » PREMIER OIL PLC (PMO)




Country of Incorporation

Trading Currency

LSE Market



United Kingdom



Current disclosures in PREMIER OIL PLC, 3 currently shorting.

% Short

% Change

Date Changed


↓ -0.02%

Mon September 7, 2020


↑ 0.33%

Fri February 26, 2021


↓ -0.11%

Fri January 29, 2021

Total shorts: 13.70%

Posts: 255
Opinion: No Opinion
Posted: October 20, 2020

Westwood Global Energy Group comments on PMO

Westwood Global Energy Group comments on Premier Oil reverse takeover by Chrysaor - part one

Premier has recommended that its investors accept a reverse takeover offer from Chrysaor creating an E&P company with 245 000 boe/d of production. Premier will retain its stock market listing, but its existing equity investors will only own c.5% of the merged company while its bondholders will only get between 61-75 cents in the US$ owed to them. Despite this, the deal appears to be fair value given Premier’s need for a financial restructuring given its May 2021 debt maturity.

The deal consolidates Chrysaor’s position as the number one UK producer. Premier’s North Sea assets are a good fit and the combined portfolio will provide synergies, with Chrysaor now having the ability to reduce its UK tax liabilities from Premier’s tax losses – though at a cost to the UK treasury. Premier’s international assets, particularly Zama and Sea Lion, could provide growth options to diversify the portfolio and offset the underlying decline in production from the mature UK fields.

This note gives a preliminary assessment of the deal from each company’s perspective and the outlook for the merged company and the wider North Sea M&A market.

The deal

Premier is to merge with Chrysaor, the UK’s largest oil and gas producer, in a reverse takeover which will maintain Premier’s stock market listing. Premier will issue new shares to Chrysaor’s private equity owners which will repay Premier’s US$2.7 billion of gross debt facilities.1 Premier’s current letters of credit worth US$0.4 billion will also be refinanced as part of the deal. Premier’s recent deal to acquire BP’s equity in the Andrew Area and Shearwater fields2 has been terminated, as has its previous refinancing plan based on the BP deal.

This latest deal was opportunistic – Premier announced last month that it was in discussions with third parties, including Chrysaor, to see if it could agree a better deal than the refinancing plan it announced in August. Premier needed to conclude a deal due ahead of its debt maturity in May 2021.3 Chrysaor was able to move quickly given its private equity ownership and has agreed a deal, subject to the approval of Premier’s creditors and shareholders. Deal completion is expected during 1Q21.

The deal with Chrysaor will see Premier’s existing creditors receive a cash payment of US$1.23 billion, equivalent to 61 cents in the US$ owed to them, together with new shares in the combined company. A partial cash alternative to the new shares is being offered, up to a capped limit of US$175 million. If creditors take the cash equivalent up to the limit available, it would be equivalent to 75 cents in the US$. The creditors will have to choose between the upside that equity in the new combined entity could potentially provide them with, or an additional 14 cents in the US$ in cash paid on completion.

Assuming that all the partial cash alternative is taken, Premier’s stakeholders would own 16.08% of the new entity, with 10.63% of that held by existing creditors and 5.45% held by Premier’s existing equity holders. Chrysaor would own 83.92%, of which 39.02% would be held by Harbour Energy, Chrysaor’s main private equity financier. If none of the partial cash alternative is taken up the new entity will be owned 23.0% by Premier (with existing shareholders having 5.0%) and 77.0% by Chrysaor (with Harbour 38.5%).

Based on Premier’s immediate pre-merger announcement share price, its market cap. was US$184 million. With its shareholders set to own 5.45% of the new entity (assuming that the creditors take the maximum cash payment available), the newco needs to have a market cap. of at least US$3.38 billion for the deal to be at a premium to the pre-deal valuation. The newco will have net debt of US$3.2 billion on deal completion, which would give an enterprise value of $6.58 billion.

The newco will have 2P reserves of 717 million boe (at end-2019) and 1H20 combined production would have been 254 000 boe/d. If an EV of US$6.58 billion is achieved, it is equivalent to EV/2P US$9.2/boe and US$25 900 per flowing boe/d. The following table compares the newco’s metrics against Cairn Energy and Enquest, with UK production, and Aker BP and Lundin, Norwegian players.

It looks highly probable that the Chrysaor / Premier newco would achieve a higher enterprise value for Premier’s shareholders than pre-deal, based on the benchmarks.

It would seem to be a fair deal for Premier’s shareholders given the company was technically insolvent and the alternatives such as the refinancing associated with the BP asset acquisition, had it gone ahead, would also have been significantly dilutive to shareholders too. Premier’s share price closed 2% up on the day of the merger announcement reflecting a perceived value-neutral deal for equity holders.

A key upside for Chrysaor from the deal will be to utilise Premier’s US$4.1 billion of accumulated UK tax losses. At end-1H20 Chrysaor had deferred tax liabilities of US$1.5 billion on its balance sheet. Although Chrysaor received a tax credit of US$96 million in 1H20, it has paid an average US$223 million/yr in tax over the past two years. Offsetting the tax liabilities from the producing assets with Premier’s tax losses could create significant value for the newco and its investors – but at the expense of significantly reduced tax revenues from the North Sea for the UK. The government’s UKCS tax revenues in 2019-20 were US$1.6 billion4 with the Brent oil price averaging US$52.3/bbl.

Further savings will be made through eliminating G&A costs from the Chrysaor / Premier merged newco. Chrysaor’s G&A costs are currently US$58.4 million/yr based on its 1H20 accounts, with Premier’s G&A costs US$8.4 million/yr. Savings are also likely on net financing costs.5 Chrysaor’s net finance costs were US$307.0 million in FY 2019 with US$2.2 billion of net debt. Premier’s FY 2019 net finance cost was US$352.5 million with net debt of US$2.2 billion. The newco is expected to have net debt of US$3.2 billion on deal completion.

The US$2.7bn includes debt and currency and interest rate hedges. Premier’s gross debt at H1 2020 was US$2.1bn with net debt of US$2.0bn
Westwood Wildcat Corporate Report, June 2020
Westwood Wildcat Corporate Report, August 2020
UK Oil and Gas Authority
Finance expenses less finance income

Posts: 255
Opinion: Buy
Posted: July 14, 2020

Jefferies say Premier Oil share price set to soar

Jefferies analysts say Premier Oil share price set to soar ahead of earnings update.

The UK-based oil and gas company will release its latest trading and operations update on Wednesday 15 July, with the stock suffering heavy losses due to a crash in oil prices amid weakening demand due to the Covid-19 pandemic.

Premier Oil will release its latest trading and operations update on Wednesday 15 July, with the stock suffering heavy losses due to a crash in oil prices amid weakening demand due to the Covid-19 pandemic.

But thanks to national lockdowns beginning to ease and OPEC+ led production cuts, oil prices have started to stabilise and found support at $40 - $42 range per barrel.

In fact, the secretary general of OPEC said on Monday that he believes that oil markets are moving closer to balance ahead of the group meeting with Russia to decide whether or not to ease production cuts from August.

Premier Oil has continued to struggle, however; with the stock falling 24% since hitting a 15-week high of 53p back on 23 June and looking likely to continue its trend lower this week.

Premier Oil is trading at 41p per share at the time of publication.
Analysts at Jefferies believe Premier Oil shares are set to soar

Even though Premier Oil continues to see its share price struggle amid challenging market conditions, analysts at Jefferies remain optimistic about the stock.

Analysts at the US-based investment bank reiterated their ‘buy’ rating for Premier Oil on Monday and set a target price of 68p per share for the stock – implying a potential upside of 65%.
Premier Oil: Technical Analysis

Shares in Premier Oil tumbled by nearly 90% from their peak at £120.85 in January to the trough at £13 in mid-March. But since hitting those lows they have recovered over 200 percent, but are still down 60% on the year.

Premier Oil stumbled into resistance at the 38.2% Fibonacci retracement line at £54.21 and came close to testing the 23.6% fib line at £38.47 last week, according to Victoria Scholar, market analyst and presenter at IG.

‘The psychological £40 mark looks to be a key support level that the stock should try to remain above if the last few month’s positivity is to remain on track,’ she said. ‘However June provided two forewarnings of potential weakness ahead, firstly with a sell signal from the RSI dropping below 70 and secondly with negative divergence with the MACD histogram.’

‘But the stock is yet to break below the ascending trendline of support, which would be bearish for its outlook,’ Scholar added.

Posts: 255
Opinion: Buy
Posted: August 20, 2018

PMO - Tolmount development sanctioned

RNS Number : 2214Y
Premier Oil PLC
20 August 2018

This announcement has been determined to contain inside information



Tolmount development sanctioned

20 August 2018

Premier is pleased to announce that the development of its Tolmount Main gas field has been sanctioned by the joint venture and infrastructure partners.

The Premier-operated Tolmount Main gas field, located in the Southern North Sea, is expected to produce around 500 Bcf of gas (96 mmboe) with peak production of up to 300 mmscfd (58 kboepd).

The project entails a minimal facilities platform exporting gas to shore via a new gas pipeline. The EPCIC (Engineering, Procurement, Construction, Installation & Commissioning) contract for the platform has been awarded to Rosetti Marino. Centrica's Easington terminal has been selected as the host facility and Saipem as the pipeline EPCI contractor. Selection of the rig contractor for the four development wells is expected imminently.

Premier's share of the capex required to develop this large gas field is estimated at US$120 million comprising project management and development drilling costs. The infrastructure joint venture between Humber Gathering System Limited (a member of the CATS Management Limited group of companies) and Dana Petroleum will own and pay for the platform and pipeline capex as well as pay for upgrades to the onshore terminal. In return, Premier will pay a tariff for the transportation and processing of Tolmount gas through the infrastructure.

The Tolmount Main project now moves into the execution phase with construction works scheduled to start later this year. First Gas is targeted for Q4 2020.

The partners in the Tolmount gas field are Premier (50 per cent, operator) and Dana Petroleum (50 per cent).

Tony Durrant, CEO, commented

"The sanction of our high return Tolmount project marks a major milestone for Premier and underpins our medium term UK production profile. Tolmount is one of the largest undeveloped gas discoveries in the Southern North Sea and is, in barrel of oil equivalent terms, similar in size to our Catcher project. We have also secured an innovative financing structure for the project which minimises our capital expenditure whilst maintaining our exposure to the upside in the Greater Tolmount Area."

Posts: 255
Opinion: Buy
Posted: January 31, 2018

PMO Award of the Andaman II licence, Indonesia

RNS Number : 3972D
Premier Oil PLC
31 January 2018



Award of the Andaman II licence, Indonesia

31 January 2018

Further to the announcement by the Government of Indonesia, Premier is pleased to confirm that it, together with its joint venture partners Mubadala Petroleum and Kris Energy, has been awarded the Andaman II Licence in the 2017 Indonesian Licence Round. The Andaman II licence is located in the underexplored but proven North Sumatra basin offshore Aceh, Indonesia.

Premier has identified numerous prospects and leads which exhibit DHIs (direct hydrocarbon indicators) on the existing 2D seismic data, significantly de-risking a potentially material gas play. Premier assesses that the overall licence has the potential for significant gas volumes which, in the success case, would be delivered to existing gas consumers in North Sumatra.

The forward plan is to acquire 3D seismic in the initial three year term.

Tony Durrant, CEO, commented:

'This award is in line with Premier's strategy of targeting low commitment high impact exploration in proven hydrocarbon provinces and has the potential to deliver significant organic growth opportunities for our existing Indonesian business in the longer term.'

Notes to editors

The JV comprises Premier (operator, 40%), Mubadala Petroleum (30%), and Kris Energy (30%).

Posts: 255
Opinion: No Opinion
Posted: December 11, 2017

Premier Oil PLC Sale of interest in ETS pipeline

RNS Number : 8939Y
Premier Oil PLC
11 December 2017

Sale of interest in ETS pipeline
11 December 2017

Premier is pleased to announce that it has entered into a sale and purchase agreement ("SPA") to sell its entire equity interest in the Esmond Transportation System ("ETS") pipeline to CATS Management Limited (an Antin Infrastructure Partners portfolio company).

Under the terms of the SPA, Premier will receive cash consideration of up to £23.6 million ($31.6 million) for its entire 30 per cent interest in ETS. The consideration consists of an initial upfront payment of £21.0 million ($28.1 million) (subject to certain customary financial adjustments) payable on completion, plus a future potential payment of up to £2.6 million ($3.5 million) linked to the achievement of certain key milestones in respect of any future development of the Pegasus field. Disposal proceeds will be used to pay down Premier's existing debt.

The ETS pipeline was constructed in order to transport gas from Esmond Area fields to the Bacton gas terminal on the North Sea Coast in North Norfolk. The pipeline is currently operated by Perenco UK Limited as operator of the Trent and Tyne fields, and is used as the export route for the Cygnus gas field recently brought on stream by ENGIE.

The effective date of the sale is 1 January 2017. Completion remains subject to obtaining all normal and necessary third party consents and regulatory approvals including discharges and release of securities. Premier expects the sale to complete in 1H 2018.

Jefferies International Limited acted as financial advisor to Premier, together with Centrica plc and Perenco UK Limited who have also entered into separate SPAs, to sell their respective interests in the ETS pipeline to CATS Management Limited.

Tony Durrant, Chief Executive, commented:
"The sale of the ETS pipeline interest is another step in realising value from the E.ON UK portfolio acquired by Premier for $120 million in 2016. The ETS pipeline does not serve any fields owned by Premier and is therefore non-core to the group."

Posts: 255
Opinion: No Opinion
Posted: November 16, 2017

PMO Trading and Operations Update

RNS Number : 6444W
Premier Oil PLC
16 November 2017


("Premier" or "the Group")

Trading and Operations Update

16 November 2017

Premier provides a Trading and Operations Update for the period 1 January to 31 October 2017.


· Production averaged 76.6 kboepd year-to-date with planned 3Q maintenance completed; on track to meet previously increased full year guidance of 75-80 kboepd

· Catcher on schedule for first oil during December; FPSO swivel and buoy successfully mated with the final rotation test imminent and final topsides system commissioning proceeding well

· Heads of Terms signed for FPSO lease extension on Huntington field, extending the life of the field

· Government agreement signed for the sale of Tuna field gas in Indonesia to Vietnam

· Zama appraisal: pre-unitisation discussions with Pemex underway; likely 4 well appraisal programme commencing late 2018

· Disposal programme ongoing including sale of Wytch Farm field for $200 million; shareholder circular to be issued imminently

· Forecast 2017 operating costs of c$16/bbl and gross G&A of $150 million, below budget and in line with previous guidance

· Forecast 2017 development, exploration and abandonment expenditure expected to be $300-310 million, down from previous guidance of $325 million

· Net debt of $2.8 billion at 30 September; debt reduction forecast at year end, including effects of ongoing planned disposals

Tony Durrant, Chief Executive, commented:

"Through strong production, cost control and disposal activity, cash generation is ahead of plan. The excellent progress on the Catcher project, combined with the recovering oil price, will accelerate debt reduction through 2018. The agreement to export Tuna gas to Vietnam, signed last week, adds to Premier's significant backlog of future growth opportunities."


Premier Oil plc

Tel: 020 7730 1111

Tony Durrant, Chief Executive

Richard Rose, Finance Director


Tel: 020 3757 4980

Billy Clegg

Georgia Edmonds

Production operations

Production for the ten months to 31 October averaged 76.6 kboepd (2016: 68.2 kboepd) reflecting a period which included the now completed planned maintenance programmes on a number of fields. Production in October averaged 77.0 kboepd. Premier expects to deliver within its previously upgraded full year production guidance of 75-80 kboepd.


1 January - 31 October 2017

1 January - 31 October 2016




Pakistan & Mauritania












Premier's operated Chim Sao field in Vietnam delivered a good production performance over the period underpinned by high operating efficiency, strong reservoir performance and a successful well intervention programme mitigating the natural decline from the field. The first of a two well infill drilling programme has been drilled and brought on-line. A second infill well will be completed by year end. Production was also robust from Premier's Indonesian assets which delivered 14.0 kboepd, with Natuna Sea Block A capturing a market share of 49 per cent of GSA1 deliveries, against a contractual market share of 47 per cent. The recent Anoa development well (WL-5X) was brought on production in August and is producing at 20-25 mmscf/d, helping to confirm and define the potential of the deeper Lama zones within the Anoa field.

UK production averaged 41.0 kboepd, up 35 per cent on the prior corresponding period, principally as a result of a full contribution from the former E.ON assets. Scheduled maintenance programmes were carried out during the third quarter in particular on Huntington (average 13.5 kboped), Solan (average 6.2 kboepd), the Elgin-Franklin area (average 5.5 kboepd) and Ravenspurn North (average 1.3 kboepd). All works have now been completed and the assets are performing in line with our forecasts.

Premier's operated Babbage field continues to outperform averaging 3.1 kboped, following a successful well intervention programme. On Huntington, a Heads of Terms has now been signed with Teekay, the owner of the FPSO, to extend the firm charter period for the Huntington field beyond April 2018 for a minimum of one year with an improved rate structure.

Production from Pakistan and Mauritania averaged 6.6 kboepd in line with expectations. The reduction on the prior corresponding period reflects expected natural decline in all of the gas fields.

Development projects

In the UK, the Premier-operated Catcher project remains on schedule for first oil during December. The FPSO arrived on location on 18 October and the production buoy was successfully pulled into the hull. In the subsequent period the full hook-up process has been essentially finished with the risers, umbilicals and the installation of the ESDVs now complete. The swivel stack is in place and the geostationary pipework connected with the final rotation test due imminently. Testing of the offloading interface with the cargo tanker is underway. Commissioning activities including the running of main power generation, chemical bunkering, system filling, shutdown system testing and system leak testing, which commenced in parallel are ongoing and will be ready for the introduction of hydrocarbons from the Catcher field shortly.

The development drilling programme continues ahead of schedule. The 12 wells originally planned pre-first oil (eight producers and four injectors) have been drilled, completed and tied back to the FPSO and drilling activities on phase 2 of the Catcher development wells are ongoing. The first of these phase 2 wells (CCP9) continued the trend of delivering results on, or better than, prognosis in terms of reservoir quality and flow rates. Total project capex, including remaining contingency is forecast at $1.6 billion, 29 per cent lower than the sanctioned estimate.

Elsewhere in the UK, offshore and onshore FEED on the Premier-operated Tolmount field in the Southern Gas Basin is progressing well. Tendering of the major project scopes is underway and proposals have been received for the pipeline, drilling rig and platform; these are now being evaluated. Alongside the FEED process, the draft Field Development plan has been submitted to the OGA and the Heads of Terms signed with Dana Petroleum and CATS Management Limited in respect of the infrastructure partnership for the Tolmount development, is being progressed into final documentation ready for development sanction planned for the first half of 2018.

In Indonesia, the BIGP development project in Natuna Sea Block A is proceeding well. The Indonesian Government formally approved the project in October and all major contracts have now been awarded. Premier is targeting first gas in 2019 to backfill our existing Singapore and domestic market contracts. On 10 November 2017 Petrovietnam, Premier and SKK Migas (on behalf of the Indonesian Government) entered into a Memorandum of Understanding for future gas sales from the Tuna Field in Indonesia into Vietnam. This represents a significant step forward in the potential development of the field envisaging using a new cross-border pipeline to connect the Tuna area to the existing Nam Con Son Pipeline system in Vietnam. Further appraisal in the area is planned for 2019.

Exploration and appraisal

Premier is working with its joint venture partners Talos Energy (Operator) and Sierra Oil & Gas to progress the appraisal and development of the world class oil discovery at the Zama-1 well in Block 7 Sureste Basin offshore Mexico. The Zama discovery extends into a neighbouring block operated by PEMEX. Discussions have commenced and are progressing well, to agree a pre-unitisation agreement with PEMEX to enable an appraisal programme to commence in late 2018 or early in 2019.

In the UK, operations on the Ravenspurn North Deep well (Premier carried 5 per cent interest), which is testing the potential of a deep Carboniferous age horizon underlying the Ravenspurn North field are ongoing and the well remains on tight hole status.

Portfolio management

As previously announced, Premier entered into a sale and purchase agreement to sell its interests in Licences PL089 and P534, which contain the Wytch Farm field, to Verus Petroleum (SNS) Limited ("Verus") for $200 million cash consideration. The transaction was subject to the pre-emption rights of existing joint venture partners and Premier subsequently received notification from Perenco UK Limited ("Perenco") of its intention to exercise those rights. It is therefore expected Premier will shortly enter into a sale and purchase agreement with Perenco on materially the same terms and conditions as were previously agreed with Verus, including unchanged cash consideration of $200 million. The disposal will be conditional, amongst other things, on shareholder approval and a circular will be issued to shareholders convening a general meeting as soon as possible. Subject to fulfilling the conditions, completion is expected by the end of December 2017.

In April, Premier announced the sale of its Pakistan business to Al-Haj Group for $65.6 million. To date, Al-Haj has paid non-refundable deposits in accordance with the agreement of $25 million. In addition to the clearance received from the Competition Commission of Pakistan, engagement with the Pakistani authorities with respect to other approvals is progressing well and completion of the transaction is expected by year end. In the meantime Premier continues to collect the cashflows generated from the Pakistan assets.

Discussions are ongoing with a number of parties regarding potential non-core asset disposals principally from the E.ON portfolio acquired in 2016.

Premier anticipates 2017 full year operating expenses of c$16/boe in line with previous guidance. The increase from 1H 2017 reflects the expected lower production in the second half of the year as a result of the scheduled Q3 maintenance period. Gross G&A costs are forecast at $150 million for 2017 below the budget for the year.

Premier's development, exploration and abandonment expenditure for 2017 is now expected to be between $300 - 310 million, down from previous guidance of $325 million.

Despite the forward curve being in backwardation, Premier has taken advantage of the improvement in the commodity prices to increase its hedge position into 2018 through a combination of fixed price and option sales.

At 31 October, the Company's hedge position was as follows:

Q4 2017

H1 2018

H2 2018

Oil hedges

% hedged

Price ($/bbl)



Price ($/bbl)



Price ($/bbl)

Fixed price oil hedges







Options (average floor price)







UK gas hedges

% hedged

Price (p/therm)



Price (p/therm)



Price (p/therm)

Fixed price







Net debt at 30 September was $2.8 billion, reflecting previously guided one off adjustments incurred in connection with the refinancing becoming effective, translation differences on non-dollar denominated debt and lower Q3 production. With the increase in production in Q4 and higher oil prices, Premier expects to generate positive free cash flow in Q4 despite ongoing capex at Catcher and to be cash flow positive for the full year including planned disposals. As at 30 September, Premier retains significant cash and undrawn facilities. As capex commitments (including the completion of the development phase of the Catcher field) reduce, debt reduction will accelerate through 2018.

Future announcements

The next Premier Trading and Operations Update will be provided on 11 January 2018. Premier's Full Year Results for 2017 will be announced on 8 March 2018.

Posts: 255
Opinion: No Opinion
Posted: November 7, 2017

PMO shorts increasing and so is the SP :)

GLG Partners LP

Highbridge Capital Management LLC

Whitebox Advisors LLC

All three of these fund managers increased their short positions in PMO at the beginning of November and the SP has continued to rise each day!

PMO is 11.57% short at time of posting and SP is 76.75p

The SP was around 72p when these shorts opened.

Posts: 255
Opinion: No Opinion
Posted: October 23, 2017

Update on the Catcher development



Update on the Catcher development

23 October 2017

The BW Catcher Floating Production Storage and Offloading ("FPSO") vessel arrived at the Catcher field at 23:00 on Wednesday 18th October. The hook up of the Submerged Turret Production ("STP") buoy mooring system was completed on the 19th October with the vessel successfully completing a rotation test around the buoy on the 20th October. The final pull-in of the risers and umbilicals is now underway and commissioning activities have also commenced in parallel. Delivery of first oil remains on schedule by the end of the year.

A short presentation setting out the key milestones in the hook up and commissioning programme to be carried out in advance of first oil and the plans to ramp up to plateau production levels, is available on the Company's website.