Det norske oljeselskap has paid $120m in cash for Premier Oil Norge (PONAS), the Norwegian subsidiary of UK-based Premier Oil Plc, which is involved in oil production in the North Sea.
The purchased assets comprise the Vette development, which Premier Oil operates, and the adjacent Mackerel and Herring discoveries, in which the company has a 50% interest. The offshore oilfields are located in Norwegian waters of the North Sea.
The acquisition also includes Premier Oil Norge’s 50% interest in the Frøy field and seven exploration licences in the North Sea. The company has 26 employees in Norway.
Premier Oil Norge is estimated to hold tax losses carry forward, undepreciated tax balances and exploration tax refunds equaling approximately NOK 1.0bn ($115.2m) at the end of 2015, Det norske oljeselskap said in an exchange filing today.
The transaction will be funded through existing cash and undrawn debt facilities, and is expected to be completed by the end of the year, pending government approval.
“Following the recent closing of the Svenska transaction, the acquisition of PONAS is another bolt-on acquisition that further underlines our firm belief in and commitment to the Norwegian Continental Shelf,” Karl Johnny Hersvik, CEO of Det norske, said in the statement.
Analysts at Swedbank said in a note Det norske’s acquisition of PONAS is worth around 9% of its market value but gives the buyer access to relatively cheap barrels of oil and increases its asset base.