Premier Oil to buy Encore for $340m

09:08, 6 October 2011

LONDON. October 6. KAZINFORM British oil producer Premier Oil is to buy North Sea-focused Encore Oil for 221 million pounds ($340 million), continuing its strategy of expanding by incremental acquisitions rather than concentrating on high-risk, high-impact exploration; Kazinform refers to China Daily.

While the headline price being paid represents a heady $20 per barrel for Encore's reserves, Chief Financial Officer Tony Durrant pointed out that the deal included tax losses and exploration potential.

Citigroup said the tax losses brought the purchase price down to $17/bbl, still at the upper end of recent transactions. The bank also noted that raising Premier's stake in the Catcher field to 50 percent could allow the company to accelerate development of the field, potentially raising earnings.

Premier said on Wednesday it was offering 70 pence per Encore Oil share, a 55 percent premium to Tuesday's close, and that Encore investors could take the bid in cash or Premier shares. Encore was advised on the deal by Rothschild.

London-based Premier also said it was on track to deliver on its stated strategy and to realize its medium-term target of pumping 100,000 barrels of oil equivalent per day; Kazinform cites China Daily.

To learn more go to www.chinadaily.com.cn

News World News