Chrysaor moves to buy Premier Oil in $1.2 billion reverse takeover

Privately-held Chrysaor has struck a reverse takeover deal with Premier Oil that will create the biggest quoted independent oil and gas exploration and production company listed in London.

North Sea-focused Premier’s US$2.7 billion of debt and hedging liabilities will be repaid and cancelled via a $1.232 billion cash payment, along with Chrysaor shares.

Chrysaor shareholders will own at least 77% of the combined group, which will produce around 250,000 barrels of oil equivalent per day in 2020 according to Wood Mackenzie. Premier shareholders will own up to 5.45% of the new entity.

Wood Mackenzie’s principal analyst, North Sea upstream Neivan Boroujerdi said: “Premier’s balance sheet has been heavily debt laden since the last oil price crisis, a result of investment in growth projects as the cycle turned.

“It was in the process of refinancing when the Chrysaor approach was made.

“For Chrysaor there are several drivers. The company has a strong balance sheet and solid cash generation, but it needed to take advantage of this strength, as its portfolio was in steep decline.”

The acquisition of Premier, whose origins go back to 1934, also gives Chrysaor international growth options with development assets in the Falklands/Malvinas and Mexico.