Premier Oil to sell Wytch Farm field in UK for $200m


Exploration and production company Premier Oil has signed an agreement to sell its entire interest in the Wytch Farm field onshore UK to an undisclosed company for $200m.

Under the agreement, Premier will sell all of its 33.8% interest in the field, in addition to the expected release of letters of credit worth about $75m with respect to future field abandonment liabilities.

The development follows an agreement signed by the company in July this year to acquire an additional 3.75% interest in licences PL089 and P534, which contain the Wytch field, from Maersk Oil for £11.7m.

With the acquisition, Premier increased its stake in the field to 33.8%.

As per the latest half year results, the company has a debt of around $2.7bn.

"Under the agreement, Premier will sell all of its 33.8% interest in the field, in addition to the expected release of letters of credit worth about $75m with respect to future field abandonment liabilities."

The Wytch field’s production, net to Premier’s pro forma 33.8% interest stood at 5,000 barrels of oil equivalent per day as of 30 June this year.

The closure of the transaction is conditional on signing a sale and purchase agreement and obtaining lender approval.

In 1984, Premier acquired a 12.38% interest in Wytch Farm, with another acquisition round comprising 17.715% interest in the field in 2011, taking its overall interest to 30.1%.

Production from the field, which has been developed with 11 well sites linked to a central gathering station, is exported through a pipeline to the Hamble terminal near Southampton for tanker loading.

Other stakeholders in the field include Perenco UK, Maersk Oil, Ithaca Energy and Repsol Sinopec Resources UK.