PREMIER OIL, the FTSE 250-listed oil company, is expanding its North Sea presence with a £221m cash deal to buy rival EnCore Oil.
The potential takeover will increase Premier’s stake in the Catcher field – one of the largest discoveries in the UK North Sea in recent years – from 35 to 50 per cent.
Premier said yesterday it was offering 70p per share, representing a 55 per cent premium to Tuesday’s closing price, and that Encore investors could take the bid in cash or Premier shares.
EnCore’s directors have backed the deal with their 7.4 per cent stake, as has investment group Blackrock, the firm’s largest shareholder, which owns 5.8 per cent.
Premier, which operates in the Middle East and South East Asia as well as the North Sea, said it was on track to deliver its medium-term target of pumping 100,000 barrels of oil equivalent per day.
“This is a perfect fit for Premier given our existing North Sea assets,” said Simon Lockett, Premier Oil chief executive. “Operatorship of and the increased equity position in Catcher will help us to progress this development in line with our time frame and maintain momentum across our portfolio.”
Numis Securities said the deal, Premier’s fourth acquisition in the UK this year alone, could lead to other takeovers in the UK sector following the recent fall in oil prices.
MEET THE ADVISERS
RBC Capital Markets, the corporate and investment banking arm of Royal Bank of Canada, acted as exclusive financial adviser to Premier Oil on its £221m acquisition of Encore Oil.
The team is being led by Matthew Coakes, director in European equity capital markets and Jeremy Low, managing director of the RBC’s oil and gas investment banking team.
Coakes, who joined RBC Capital Markets in September 2009 from Goldman Sachs, has worked on a number of deals including Dana Petroleum’s £272m acquisition of Petro Canada Netherlands as well as Resolution’s £2.8bn acquisition of Axa’s UK arm last year.
Jeremy Low kicked off his career at Royal Dutch Shell working in Aberdeen, before moving into investment banking. He worked as an investment banker at Deutsche Bank before joining RBC in 2008.
Rothschild’s oil and gas team acted as sole financial adviser to EnCore Oil, with a team led by Neeve Billis and David Hemmings.