Completion of Strategic Review of North Sea E&P Business – divestiture of UK Exploration & Production Business to Premier Oil
- E.ON to sell its UK E&P business to Premier Oil
- Transaction is the logical second step of the strategic review of the E&P North Sea business and further reinforces E.ON´s financial flexibility
- Strategic review of E.ON’s E&P North Sea business is hereby completed
E.ON has signed an agreement to sell 100 percent of its shares in its UK E&P Subsidiaries to Premier Oil. The transaction value is $0.12 billion as at the effective date of January 1st 2015. As a result of the transaction, E.ON will also release provisions for asset retirement obligations (decommissioning obligations) associated with the business of $0.45 billion as well as realizing $0.05 billion of value for other adjustments, including the 2015 hedge positions. The transaction will therefore have a total Economic Net Debt Impact to E.ON of $0.62 billion. In addition, E.ON will retain cash of approximately $0.15 billion which existed at the effective date.
E.ON placed its North Sea E&P business under strategic review in November 2014. The UK oil and gas upstream portfolio comprises equity interests in 40 licenses, including a 5.20 percent interest in the Elgin-Franklin field, 47.00 percent interest in the Babbage field and a 50.00 percent interest in the Tolmount discovery. The divestment of E.ON E&P UK represents the second and final step in E.ON´s review process of the Exploration & Production North Sea business, following the sale of the Norway E&P business which concluded in December 2015.
E.ON CFO Michael Sen said: “The successful sale of our E&P business in the UK represents the final step of the strategic review, with all E.ON E&P North Sea assets having now been divested. This transaction further strengthens our financial profile and provides flexibility to implement our strategy and to reposition the Group. The outcome demonstrates that E.ON E&P is a high performing business with a strong asset base and superbly professional employees. Premier has a long history in the UK and I am convinced that the company will continue to build on this success story in the future. I want to thank all E.ON E&P UK employees for the excellent work they have done as part of E.ON.”
The transaction is subject to customary regulatory approvals as well as Premier Oil shareholder and lender approval and is expected to be closed in the first half of 2016.
Premier Oil plc, founded in 1934 and headquartered in London, is a leading independent exploration and production company with significant oil and gas interests and operations in the North Sea, South East Asia, Pakistan and the Falkland Islands. The company produces around 60,000 boepd and it has an existing portfolio of producing, development and exploration opportunities. As at December 31, 2014, it had reserves and resources of around 800 mmboe.