Premier Oil Boosts Stake in Bream Field

UK independent Premier Oil reported Thursday that it has agreed to increase its stake in production license 407 in the Norwegian North Sea.

Premier said a transaction with BG Norge will see it increase its existing 40-percent equity interest in the block to 50 percent, while Premier will also assume operatorship of PL407. Its partner KUFPEC Norway will acquire 30 percent of the block. Tullow Oil will retain the remaining 20 percent of the license.

The aggregate considerable payable by Premier and KUFPEC will be $22.2 million.

Under a separate agreement, KUFPEC will acquire another 30-percent interest in the adjacent PL406 license from Premier for a consideration of $5 million.

PL407 contains the Bream field, while PL406 holds the Mackerel discovery. Premier currently estimates 2C resources covering the Bream and Mackerel fields of around 50 million barrels of oil equivalent.

Premier Chief Executive Simon Lockett commented in a company statement:

"We are pleased to have reached agreement with BG and KUFPEC for the future of the Bream Area development.  We look forward to assuming operatorship, working with the new partnership group and defining fully the Bream Area project."

Premier also released a trading update Thursday in which it reported that its production averaged 58,700 barrels of oil equivalent per day during the first half of 2013, up slightly on 1H 2012 which saw production come in at 58,400 boepd.

Commenting on the results, Lockett said:

"During the first half, we have made valuable discoveries across our acreage and we continue to build the materiality of our exploration portfolio with new license awards. We have also successfully progressed our development and pre-development projects which underpin the company's future strong cash flow growth."

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