MercoPress. South Atlantic News Agency

Falklands expects Premier Oil/Chrysaor merger will create new opportunities for Sea Lion oil/gas development

The proposed transaction is complex, “but will undoubtedly strengthen Premier’s current position and create new opportunities to progress the Sea Lion development”, Stephen Luxton said

The Falkland Islands Government has taken notice of the recent press release concerning the proposed merger of Premier Oil plc and Chrysaor Holdings Ltd.

Stephen Luxton, Director of Mineral Resources for FIG, said: “We have been working closely with Premier Oil for some time to create attractive economic conditions in the Falkland Islands to facilitate external investment in the Sea Lion development project.

“The proposed transaction announced this week is complex and will need further analysis, but it will undoubtedly strengthen Premier’s current position and create new opportunities to progress the Sea Lion development.”

FIG will continue to monitor the progress of the corporate merger, which is expected to complete in early 2021 following the necessary shareholder, creditor and regulatory approvals.

According to reports of the merger, Premier Oil Plc will be acquired by Chrysaor Holdings Ltd. in a reverse takeover, creating the largest listed independent oil and gas producer in the UK North Sea.

The deal marks the end of the road for one of the oldest independent oil explorers. After years laboring under a mountain of debt Premier has finally bowed to pressure from creditors, with CEO Tony Durrant abandoning his plan to acquire some of BP’s North Sea assets and agreeing to step down.

The transaction will create a stronger company, pumping more than 250,000 barrels of oil equivalent day. Yet Premier’s current shareholders will end up with just a sliver of the combined group -- no more than 5.45%, while Chrysaor’s backers will get at least 77% and Premier’s other stakeholders the rest.