Shares of FTSE 250 oil and gas firm Premier Oil rose after it announced that it will pay $231m for a 60 per cent stake in Rockhopper Exploration's licence in the Falkland Islands.
An initial payment of $231m will be made in cash plus an exploration carry of up to $48m. Subject to field development plan approval it will also pay a development carry of up to $722m, bringing the total payment to $1bn.
Rockhopper's licence interests in the Falkland Islands include the Sea Lion development.
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Commenting on today's announcement, Premier chief executive Simon Lockett said: "Rockhopper has made excellent progress in commercialising the Sea Lion project which offers attractive returns and fits well with Premier's proven operating and development skills."
"This transaction extends our strong growth profile beyond 2015 and offers both exploration and development upside for our shareholders. We look forward to working closely with Rockhopper and the Falkland Island Government on this very exciting project."
Premier said the deal will be funded from a combination of Premier's existing cash resources, facilities and cash flow from operations.
Premier and Rockhopper have also agreed to pursue joint exploration opportunities in the Falkland Islands and in selected areas offshore Southern Africa.
CJ
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