Premier Oil commences debt reducing drive with $200 million oilfield sale

Independent UK oil producer Premier Oil has confirmed reports that it will sell its 34% stake in the biggest onshore oilfield in Western Europe, as it attempts to chip away at its US$2.7 billion debt pile.

The beleaguered firm will relinquish its entire 33.8% share in Wytch Farm, located in the South of the UK, for a fee of $200 million but declined to name the buying company.

However, reports have suggested that independent North Sea exploration firm Verus Petroleum are the interested party. Verus focuses on mature oil and gas fields across the region.

Premier also expects to release letters of credit amounting to around $75 million, which will cover future decommissioning liabilities.

Over the last year Premier has endured an arduous financial restructuring process after building considerable amounts of debt during the depths of the recent global oil prices crash.

Under the terms of a deal made with its lender group, the company has until May 2021 to repay its debt.