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Bharat Vasandani Madhavan N. & Hari... Urvish Dave

Market & Company Research Store > Details

Year: 2012

Contents: 7 pages

Country: Falkland Islands

Sector: Exploration and Production (Energy)
Premier Oil to Acquire 60% Interest in North Falkland Basin Licenses from Rockhopper Exploration for $1 Billion to become Operator of Sea Lion FPSO Development - Deal Analysis from GlobalData

Summary

Premier Oil PLC (Premier Oil) agreed to acquire 60% interest in the North Falkland basin licenses from Rockhopper Exploration PLC (Rockhopper) for a purchase consideration of $1 billion. The company will fund the acquisition cost from a combination of its existing cash resources, facilities and cash flow from operations.

The total exploration carry cost is estimated to be $120m ($48m for Rockhooper and $72m for Premier Oil) and total development cost for Sea Lion project is $1,800m ($722m for Rockhooper and $1,078m for Premier Oil). Under the terms of the agreement, Premier Oil will initial pay $231m in cash plus an exploration carry of up to $48m of Rockhopper's share, subject to field development plan approval, a Rockhopper’s Sea Lion development carry of up to $722m. Additionally, Premier Oil agreed to provide standby financing arrangement at Rockhopper’s option to cover development expenses beyond the $722m.

Following the transaction, Premier Oil will become the operator of the Sea Lion oil and gas development in the South Atlantic. The completion of the transaction is subject to approval from the Falkland Islands government. The transaction implies deal value of $5 per boe of contingent resources and $5.71 per boe of recoverable reserves.

Scope

- Rationale behind Premier Oil's plan to acquire 60% interest in North Falkland Basin Licenses
- Geography covered - Falkland Islands

Reasons to buy

- Develop a sound understanding of the Premier's plan of investing in North Falkland basin, issues and challenes in the region.
- Rationale behind the company's plan to acquire 60% interest in the North Falkland basin.

Keywords

FPSO, Sea Lion, North Falkland basin
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