Chrysaor and Premier Oil to merge

Chrysaor and Premier Oil have unveiled merger plans to create the largest independent oil and gas company on the London Stock Exchange (LSE), with a combined North Sea production of over 250,000 boe/d.

In response to the news, OGUK’s Chief Executive Deirdre Michie, said: ‘Chrysaor and Premier Oil are great stewards, contributors and champions of this industry so this investment is encouraging news for the UK Continental Shelf. With companies increasingly looking to see how they can work together to meet as much of our oil and gas demand from domestic resources instead of imports, this merger will help to stimulate further activity for our hard-pressed supply chain and contribute to an inclusive transition towards a low carbon economy.’

Daniel Rogers, Oil and Gas Analyst at GlobalData, says: ‘With Premier Oil carrying a $2bn debt load, and private equity players unable to execute high-value exit strategies through IPOs or divestments under current market conditions, this deal makes a lot of sense for both parties. With the stock price down over 80% from the start of the year, Chrysaor will take advantage of the depressed market value as an expansion opportunity and to list the combined businesses on the LSE.’

He continues: ‘The two companies will create a dominant North Sea player with production of around 250,000 boe/d and growth opportunities such as the Tolmount gas development – which GlobalData expects to boost the combined production to almost 270,000 boed in 2021. The merger will allow Chrysaor to expand its significant North Sea footprint with low-cost assets but will also gain exposure to producing assets in Indonesia and high-value development projects in South America. The combined entity will have a strengthened financial backing that should allow Premier’s pre-sanctioned growth developments to move forward.’