Premier Oil swung to a $1.3bn pre-tax loss in its final set of results before its proposed merger with fellow North Sea firm Chrysaor completes.
The FTSE 250 firm said that the loss was mostly driven by one-off charges, including $817m relating to the partial derecognition of Premier’s UK ring fence tax losses.
It added that these losses were expected to be re-recognised if its merger completes as planned on 31 March. A court hearing to approve the deal is expected tomorrow.
If, as expected, it is approved, shares in the new group will be readmitted to trading as Harbour Energy on 1 April.
Premier’s production in 2020 averaged 61,400 barrels a day, down from around 78,000 barrels a day in 2019. The firm had guided for production of 61,000 to 66,000 barrels.
When it has merged with Chrysaor, the firm will be the biggest independent oil explorer listed on the London markets.
The group will have a combined production of over 250,000 barrels of oil per day, Premier has said.
Premier was approached by the private firm over the summer while trying to refinance some of its hefty debt obligations.
“Given the market conditions at that time, it was felt that an all share merger with Chrysaor had greater execution certainty for stakeholders than the standalone solution which was dependent upon a significant equity raise”, the firm said in a statement today.
Its $2.7bn debt pile will be repaid and cancelled on completion of the merger.
Shares in the firm were down slightly this morning.