LONDON (Reuters) - Premier Oil (PMO.L) is seeking to sell half of its stake in the Babbage gas field in the North Sea, according to a document seen by Reuters, as it tries to pay down a heavy debt pile it accrued during the oil market downturn.
The London-listed oil and gas producer completed a financial restructuring earlier this year and is counting on revenue from disposals and the start-up of its new Catcher field to help it reduce debt that reached $2.74 billion (£2.07 billion) by the end of June.
Premier holds a 47 percent stake in the Babbage field which it also operates and is seeking to sell a 23.5 percent non-operating interest, according to Premier’s sale prospectus, which invites indicative offers by end-September.
It is also offering a 25 percent stake in the nearby Cobra discovery where it plans to drill an appraisal well next year, the document said.
Premier gained the assets through last year’s $120 million acquisition of E.ON’s North Sea business.
Chief Executive Tony Durrant confirmed to Reuters on Thursday that some of those assets are up for sale, without giving details.
He said any bidding process for the Babbage stake had not yet been launched.
“We’re still in the process of tidying up the E.ON acquisition. The core assets from that acquisition are Elgin-Franklin, Tolmount and Huntington, they have all been very successful. For the right offer we’d consider selling other assets from the E.ON portfolio,” Durrant told Reuters.
Banking sources said the company hopes to raise up to $100 million from the sale.
Babbage, located in the southern section of the North Sea of England’s eastern coast, began production in the summer of 2010. It is expected to produce around 200 billion cubic feet of natural with a remaining field life of over 15 years, according to the prospectus.
Earlier this week, Premier said it agreed to sell its stake in the Wytch Farm onshore oil field to Verus Petroleum for $200 million.
It has also put its 30 percent stake in the ETS pipeline up for sale, Durrant said in July.
“We’re looking to increase our disposal target quite significantly above $100 mln for this year... to accelerate the debt reduction process,” he said at the time.
Editing by Elaine Hardcastle