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Premier Oil’s shares suspended for third day

Premier Oil news
OGUK appoints Premier Oil boss to board

Premier Oil shares remained suspended yesterday amid uncertainty over the status of the firm’s latest North Sea investment.

The stock was worth 19p per share before Wednesday’s request from London-based Premier to halt trading, due to its £83million-plus acquisition of assets from Germany’s E.ON.

A working capital adjustment to the initial £83million price tag means there is doubt about whether the deal should classed as a “reverse takeover”, which typically means the target is larger in value than the bidder, under Financial Conduct Authority listing rules.

In an update yesterday, Premier said: “Premier’s ordinary shares remain suspended from trading on the London Stock Exchange, pending clarification from the UK (UK listing authority) on the status of the proposed acquisition of E.ON’s UK North Sea assets.

“Discussions with the UKLA remain ongoing and there can be no certainty over the period that the shares will remain suspended.

Premier dropped out of the FTSE 250 Index last month, having been hit by the slump in oil prices.

Since the end of 2015, the firm’s share price has collapsed by 60% – wiping more than £140million off its stock market value.

Premier is currently worth £96.5million and the assets it is buying from E.ON may end up costing it more than this figure.

A total of 40 UK North Sea oil and gas licences are changing hands in the sale, which is subject to shareholder approval.

They include stakes in “world-class asset” Elgin-Franklin, Huntington, Babbage and Tolmount, one of the largest discoveries in the southern gas basin in recent years.

Premier said its move added significant production and cash flow this year and next, even at current oil and gas prices.

Its net output in 2016 is expected to increase by about 15,000 barrels of oil (boe) equivalent per day and add around 64million boe to net reserves.

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