Premier Eyes UK Tolmount Farmout, ETS Sale
UK-listed producer Premier Oil said January 12 it is seeking offers for its 30% interest in the Esmond Transportation System (ETS), a gas pipe system acquired last year through its $120mn acquisition last year of German utility E.ON's UK North Sea assets.
“Indicative offers have been received from interested parties with the process expected to conclude during 1H 2017,” said Premier. Several UK North Sea midstream assets have been sold in recent years by firms keen to raise extra drilling cash: in late November, US independent Apache announced the sale of its 30.28% stake in Sage and 60.56% in Beryl gas pipeline systems to investment fund Ancala for an undisclosed amount, while in 2015 Alberta-based Iona Energy sold a 2.5% stake in ETS, which lands southern North Sea gas into Bacton in eastern England to France's Engie for $2mn.
Also acquired from E.ON was a 50% interest in the 0.2 trillion to 1 trillion ft3 Tolmount gas discovery, now Premier-operated. In its trading update January 12, Premier said it has “also instigated a process to identify possible investors for a 20% interest in Tolmount” after unsolicited offers of interest.
Premier CEO Tony Durrant (Photo credit: Premier Oil)
Premier said the development concept for the field is at an advanced stage, comprising a standalone platform and a new gas export pipeline to shore, and will be subject to a formal approval process in 1Q 2017; contracts for front-end engineering (FEED) are expected to be awarded this quarter.
The company also said its Catcher oil development, also in the UK North Sea, is still targeting start-up later this year; capex is now forecast at $1.6bn, 29% lower than the sanctioned estimate, with eight development wells already completed. Sail-away of the Catcher floating production ship (FPSO) from Singapore is expected to be around mid-2017, it added.
Premier said its global equity production grew to 71,400 barrels of oil equivalent per day in 2016, from 57,600 boe/d the previous year, in line with previous guidance – with most of the increase in the UK where its net production doubled to 33,000 boe/d as a result of a full contribution from the ex-E.ON assets and new production from the Solan oil field in the UK West of Shetland.
Mark Smedley