Shares in Premier Oil have risen nearly five per cent after it announced it is selling its operations in Pakistan for $65.6m (£52.6m).
The UK-based firm agreed to sell Premier Oil Pakistan Holdings to Al-Haj Energy Limited as part of its strategy to dispose of non-core assets. The cash from the sale will be used to reduce net debt.
Al-Haj has paid a deposit of $15m and will pay a further interim deposit of $10m within the next 60 days, and Premier will retain 2016 net cash flows, the group said. Premier expects a book gain on disposal of around $40m.
Subject to government and regulatory approvals, the deal is expected to close by the end of 2017.
Tony Durrant, chief executive, said: “We are pleased to have reached agreement to sell our Pakistan business. While now non-core for Premier, our Pakistan business has consistently outperformed our expectations over the years and this is testament to the hard work and skill of our team in Islamabad.”
Premier's shares were up 4.94 per cent at 63.75p in morning trading.
In March it reported net debt increased to $2.8bn by the end of 2016, up from $2.2bn the previous year. However, Premier noted debts were down from peak levels reached in the third quarter of 2016.