Premier Refinances for BP UK Asset Deal (Update)

(Adds H1 2020 results summary at end)

UK producer Premier has agreed heads of terms for a long-term refinancing of its $2.9bn debt facilities with creditors who account for over 45% of the loans, it said August 20. It also plans an equity raise to cover the purchase of the BP assets, for which it agreed last month a lower price of $210mn.

The maturities of its debt have now been extended from May 2021 to March 2025 and the terms amended to "provide sufficient headroom in a prolonged lower commodity price environment." A harmonised interest rate of 8.34% is to be applied to Premier's cash credit facilities from the refinancing effective date.

Subject to shareholder approval, it has also agreed an equity raise of $230mn to fund the proposed BP acquisitions and another $300mn of new equity to reduce debt. Of the latter, up to $205mn will be existing senior debt converted into equity, to the extent that the $300mn is not raised from existing shareholders or new investors, it said.

The proposed refinancing will be conditional on total take-up under the equity raise being not less than $325mn, excluding debt-for-equity swaps. No shares acquired as part of the partial equitisation will be allowed for 12 months following the refinancing becoming effective. it said.

Output, cashflow down

Premier saw output of 67,3000 barrels of oil equivalent/day, down from 84,100 boe/d before any contribution from the BP acquisitions. But they will add 19,000 boe/d of "tax-advantaged production" to Premier's output.

The low-carbon-emitting Tolmount platform is on track to meet Q2 2021 first gas date and that will add 20-25,000 boe/d of net tax-advantaged production once at plateau.

Operating cash flow of $324mn was down from last year's $545mn; free cash flow was $25mn, down from last year's $188mn, so by the end of June net debt was just $20mn less than the $1.99bn at the end of December 2019. One-off non-cash charges of $639mn resulted in a $672mn loss after tax, compared with a $121mn profit after tax last year.