Premier Oil is to acquire EnCore Oil for approximately £221 million, the two companies have announced.
London, UK-based Premier said the acquisition is in line with its strategy of acquiring high quality assets. The deal will increase its interest in UK Licence PL1430, including the Catcher field, by 15 per cent, taking its overall interest to 50 per cent. It will also provide Premier with operatorship of the Catcher area.
Catcher is one of the largest discoveries in the UK North Sea in recent years.
The deal will also give Premier 100 per cent of the Coaster prospect east of Catcher, 40 per cent of the Tudor Rose and 28 per cent of Spaniards—all prospects close to Premier's existing Scott area facilities. It will also give the company an additional 16.6 per cent interest in the Cladhan discovery.
The acquisition will add an estimated 17 million barrels of discovered oil reserves and resources from wells drilled in the Catcher and Cladhan areas to Premier’s portfolio.
Commenting on the deal, Simon Lockett, chief executive officer of Premier, said:"We are pleased to reach agreement with the board of EnCore, who have unanimously recommended our proposed offer, and we look forward to building on what they have achieved with the business to date.
“This is a perfect fit for Premier given our existing North Sea assets. Operatorship of and the increased equity position in Catcher will help us to progress this development in line with our timeframe and maintain momentum across our portfolio. In addition to existing discoveries, this acquisition will also add a number of exploration prospects to our 2011 and 2012 exploration programme.”
He concluded: “We continue to prove through opportunities such as this that we can move quickly to add future production, reserves and resources to our portfolio. We look forward to working with the EnCore team through the transition to new ownership and welcoming EnCore employees to Premier."
Alan Booth, chief executive officer of EnCore, added: "The acquisition de-risks EnCore's development portfolio of assets, providing EnCore shareholders with an opportunity to crystallise the value created through EnCore's highly successful exploration track record. The acquisition is in line with EnCore's long stated strategy, and also gives EnCore shareholders the option of retaining exposure to EnCore's assets within the enlarged portfolio via the share alternative.
“I would like to thank all the EnCore directors and employees for their contribution to the success of the company, which I am sure will continue under Premier's ownership."
Premier operates in three core areas: the North Sea, the Middle East/Africa/Pakistan and South East Asia. The group has operations in eight countries, with proven and probable reserves of approximately 261 million barrels of oil equivalent as of year-end 2010.
London-based EnCore has interests in 13 UK Continental Shelf licences, two licences offshore Ireland and a pre-production sharing contract offshore in the Western Sahara. EnCore also has a holding of just under 30 per cent in Egdon Resources, an exploration and production company focused on onshore assets with interests in the UK and Western Europe.
EnCore’s net profit for the year ending 30 June 2010 was £11.4 million.
