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UPDATE 2-Premier increases stake in UK field after BP sale
June 20, 2011 / 6:25 AM / 6 years ago

UPDATE 2-Premier increases stake in UK field after BP sale

* CEO says deal “good value”

* 12.5 million bbls at $8.80/bbl equivalent

* Shares down 2.0 pct (Adds detail, CEO comments, analyst, share price)

By Tom Bergin

LONDON, June 20 (Reuters) - UK explorer Premier Oil Plc has agreed to pay around $110 million to increase its stake in the Wytch Farm fields in Dorset, southern England, boosting reserves at what it said was an inexpensive price.

Premier said on Monday it had exercised pre-emption rights to give it an additional 17.715 percent interest in the assets, after oil major BP Plc agreed to sell its controlling stake to unlisted French explorer Perenco.

The fields produce 13,000 barrels per day and Premier’s new stake brings 12.5 million barrels of proved plus probable reserves, at $8.80 a barrel.

“It’s good value,” Chief Executive Simon Lockett said.

The company will pay $96 million plus further payments of up to approximately $14.4 million, dependant upon government approval of the field development plan.

Citigroup said it had valued the stake at $135 million.

Nonetheless, Premier shares fell 2.0 percent against a 1.3 percent drop in the STOXX Europe 600 Oil and Gas index .

Some investors had expected Premier to buy the whole 68 percent stake being sold by BP after Lockett told Reuters earlier this month the company could exercise its pre-emption rights.

BP earlier agreed to sell its interest in the assets as part of a plan to raise up to $30 billion to pay for the Gulf of Mexico oil spill. (Reporting by Tom Bergin, Editing by David Holmes and Hans-Juergen Peters)

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