Premier Oil bondholders jump at offer for convertible swaps

PREMIER Oil’s offer of a convertible bond swap has been met with strong demand from investors.

Holders representing more than 98 per cent of $250m (£156m) worth of Premier Oil’s convertible bonds due in 2014 elected to swap into guaranteed convertible bonds due in 2018, the oil and gas company said yesterday.

The new bonds, which will have a conversion price of $7 and a coupon of 2.5 per cent, compare to the existing bonds which have a conversion price of $6.69 and a coupon of 2.875 per cent.

The settlement date for the bonds is expected to be in the next few days.

Chief executive Simon Lockett said that he welcomed the high level of response from bondholders. “The exchange offer takes advantage of improved terms and longer maturity available in the current convertible markets,” he said.

Premier, listed on the FTSE 250, announced the exchange offer two weeks ago, and said that the swap was conditional upon a minimum of $100m of existing bondholder acceptances.

The firm, which has operations in the North Sea as well as a presence in Asia, the Middle East, Africa and Pakistan, has a resource base in excess of 500m barrels of oil equivalent. It is currently producing around 60,000 barrels of oil each day, but is targeting a rate of 100,000 barrels a day in the medium term.