Premier Oil signs agreement to sell Pakistan business to Al-Haj Energy

Premier Oil has signed an agreement for the sale of Premier Oil Pakistan Holdings to Al-Haj Energy (Al-Haj) for a cash consideration of $65.6m.

Under the deal, Al-Haj has already paid a deposit of $15m to Premier and will pay a further interim deposit of $10m within the next 60 days.

The deal is in line with Premier’s strategy to sell non-core assets and use the proceeds from the sale to reduce the company’s net debt. 

The date of the transaction is 1 January. Premier will retain 2016 net cash flows. 

This deal is subject to receipt of customary government and regulatory approvals and is expected to be completed by the end of this year.

Premier expects a book gain of $40m on divestment.

Premier Oil CEO Tony Durrant said: “We are pleased to have reached an agreement to sell our Pakistan business.

“While now non-core for Premier, our Pakistan business has consistently out-performed our expectations over the years and this is testament to the hard work and skill of our team in Islamabad.”

In this transaction, Scotiabank is acting as the sole financial advisor to Premier.

Premier’s business in Pakistan includes non-operated equity interests in six gas producing fields.

Last year, the fields generated net profit of $19.8m after tax, including a one-time non-cash gain of $5.7m for the Kadanwari field.

The value of all assets attributed to Premier Oil Pakistan Holdings was nearly $40.7m, as of 31 December 2016.