Update: To merge Chrysore and Premier Oil, the PP deal was dropped

Chrisor and Premier Oil have announced plans to merge to form the largest independent oil and gas company listed on the London Stock Exchange.

The companies said the proposed all-stock merger would represent a reverse acquisition, with Premier shareholders holding up to 23% in the expanded group and Chrysore shareholders holding at least 77%.

Harper Energy, Chrysor’s largest shareholder, owns up to 39.02% of the investment vehicle developed by EIG Global Energy Partners.

Premier shareholders are expected to hold up to 5.45%.

The merger is expected to be completed in late Q1 or early Q2 next year.

With the approval of the regulators, shareholders and lenders, $ 2 billion of the London-listed premium total debt will be repaid upon termination of the contract.

This means Premier, whose Shares The stock traded up 10.73% at 16.82p in early trade, not continuing with the proposed refinancing in August, which included a $ 410 million increase in stock.

Premier acquired PP’s interests in the Andrew area and the Shearwater sector, which had to be paid to use the proceeds of the refinancing, not going forward.

Harbor CEO Linda Cook will become the CEO of the Coordinating Committee.

Bill Girk, the current Chrisor CEO, will assume the roles of team leader and CEO of Europe.

Prime Minister Tony Durant will step down at the end of the year.

Both companies said the deal would create a business with a “stable platform for future growth”.

The expanded group will produce more than 250,000 barrels per day and equivalent to 717 million barrels of oil.

This will accelerate the utilization of Premier’s 15 3.15 billion UK tax losses, using “substantial cost and tax synergies”.

Premier employs 800 people worldwide, of which 250 are in Aberdeen, while Chrysor had 1,200 full-time employees.

Mr Kirk said: “By this agreement we will become the UK’s largest London-listed independent E&B by all major metrics.

“By running our integrated organization and now the bulk of our international portfolio, we will gain the ability to deliver value safely and play our part in energy transformation.”

M.S. Cook said: “This transaction is the next step in Harper’s ambition to create a new independent E&B company with global relevance.

“This will significantly improve our lead position in the North Sea, where we will reinvest and expand our geographical footprint to Asia and Latin America.

“We are excited by the premier assets in these regions and consider them as the foundation for creating portfolios and further diversifying the company.”

Mr Turant said: “There is significant industrial, commercial and financial logic to building an independent oil and gas company of this size, which has a leading position in the UK North Sea.

“The Exchange Coordinating Committee will provide a solid foundation for pursuing a fully funded international development strategy.”

Premier has interests in the UK, Brazil, Indonesia, Vietnam, the Falkland Islands and Mexico.

It was established in Scotland in 1934 to pursue oil and gas exploration and production operations in Trinidad and in 1971 received its first interest in the North Sea.

Premier’s best-performing catchy area, which arrived in December 2017 in the central North Sea.

Chrysore, founded in 2007, made a splash in the North Sea in 2017 by purchasing $ 2.3 billion (b 3 billion) in assets from Shell.

This was further expanded last year by the acquisition of Konoko Philips for b2 billion (67 2.67 billion).

In 2019, Chrysor had revenue of $ 1.8 billion and pre-tax profit of $ 350 million.

In the first half of 2020, it had revenues of $ 955 million, but went to a loss of $ 180 million, which was hit by a shortfall of $ 240 million.

The first-half production at Chrysler averaged 187,000 barrels a day, with a stock of 542m barrels at the end of last year.