NORTH Sea-focused Verus Petroleum has acquired Premier Oil’s interest in the Babbage gas field in the area for £62.9 million and underlined its appetite for more deals.
The acquisition will allow private-equity backed Verus to add another producing field to its portfolio and give it an interest in the Cobra discovery, which lies close to Babbage off eastern England.
Verus Petroleum’s chief executive, Alan Curran, described Babbage as a long life asset with strong cash generation. Premier earned 2,900 barrels oil equivalent per day production from its 47 per cent share in Babbage in the first quarter.
The sale will allow Premier to cut its debt and committed exploration spend for 2019.
Verus will take on £17m exploration commitments from Premier and pay £45.9m cash to the company.
Premier’s chief executive Tony Durrant noted: “It also adds to the value realised from the E.ON portfolio, which we acquired for $120 million in 2016 and has generated free cash flow and proceeds from announced disposals of around $300 million to date.”
London-based Premier started production from the giant Catcher field east of Aberdeen with Cairn Energy in December.
Verus is based in Aberdeen. Backed by Norway’s Hitec Vision, the company has acquired interests in three producing fields.
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