This undated file handout image shows microbes (C) degrading oil (upper right) in the deepwater plume from the BP oil spill in the Gulf, a study by Berkeley Lab researchers has shown. BP agreed to sell its interest in the assets to pay for the Gulf of Mexico spill.Hoi-Ying Holman Group/Reuters
Explorer Premier Oil PLC has agreed to pay around $110-million (U.S.) to increase its stake in the Wytch Farm fields in Dorset, southern England, boosting reserves at what it said was an inexpensive price.
Premier said on Monday it had exercised pre-emption rights to give it an additional 17.72 per cent interest in the assets, after oil major BP PLC agreed to sell its controlling stake to unlisted French explorer Perenco.
The fields produce 13,000 barrels per day and Premier's new stake brings 12.5 million barrels of proved plus probable reserves, at $8.80 a barrel.
"It's good value," chief executive officer Simon Lockett said.
The company will pay $96-million plus further payments of up to approximately $14.4-million, dependant upon government approval of the field development plan.
Citigroup Inc. said it had valued the stake at $135-million.
Nonetheless, Premier shares fell 2 per cent against a 1.3 per cent drop in the STOXX Europe 600 Oil and Gas index .
Some investors had expected Premier to buy the whole 68 per cent stake being sold by BP after Mr. Lockett told Reuters earlier this month the company could exercise its pre-emption rights.
BP earlier agreed to sell its interest in the assets as part of a plan to raise up to $30-billion to pay for the Gulf of Mexico oil spill.