Premier Oil will be renamed Harbour Energy Plc after the reverse takeover by private equity-backed Chrysaor to create the British North Sea’s largest oil and gas producer, Premier said on Wednesday.
The merger is due to be completed by the end of the first quarter 2021.
Premier was struggling to deal with a heavy debt burden after its profits were slashed when oil prices were hit by the COVID-19 lockdowns. The London-listed firm struck a deal with Chrysaor in October.
Premier is due to release a shareholder circular and prospectus in relation to the merger later on Wednesday. A general meeting of Premier’s shareholders to approve the transaction is taking place on Jan. 12.
As part of the merger transition, Premier chief executive Tony Durrant has stepped down from the board. Richard Rose, who is also finance director, will take over as interim CEO on Jan. 1.
Once the merger is complete, Linda Cook will be the CEO of Harbour Energy and Blair Thomas will become chairman of the combined group.
The new company is expected to produce 200,000-220,000 barrels of oil equivalent per day (boed) next year.
Premier’s output could rise slightly next year as new production comes online and replaces declines elsewhere. The firm expects 2021 production to be around 61,000-66,000 boed, including new production from its Tolmount gas field. The company’s output has averaged 61,000 boed so far this year.
Chrysaor expects output to be 140,000-155,000 boed next year, down from 2020, due to an unusually high level of asset shutdowns due to COVID-19 related maintenance deferrals.
The equity-backed producer has hedged about 67% of its first half 2021 oil output at an average $60 a barrel. It has also hedged over 70% of its gas volumes.
Premier’s takeover could herald wider consolidation but the pool of buyers is small in a sector with an uncertain outlook.
Leading oil and gas companies, including BP and Royal Dutch Shell, want to sell large parts of their portfolios to prepare for a shift towards renewable energy.
Faced with ballooning debt, smaller exploration and production (E&P) companies also want to sell assets or partner with an investor.
By Julia Payne,