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.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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
-
Millions at risk of 'unnecessary' tax bill – how to shield your savingsMillions of Brits could be taxed on their savings interest this year as their savings interest exceeds the personal savings allowance. Are you at risk?
-
Savers will have to wait as long as 48 years to build a £1m cash ISA pot if allowance is cutChancellor Rachel Reeves is rumoured to be planning a cut to the cash ISA allowance in the Autumn Budget, making it harder for savers to build wealth. Will you still be able to build a £1 million cash ISA pot?
