Premier has built a tax advantaged production and development operated position in the UK North Sea through both acquisitions in low oil price environments and exploration success. Notably, the Group discovered the Catcher field in 2010, acquired Oilexco in 2009 and purchased E.ON's UK North Sea assets in 2016.
Premier acquired E.ON’s UK North Sea assets for a net consideration of $120 million. The acquisition, which completed in April 2016, significantly enhanced Premier’s core UK business at a compelling valuation and added stable UK gas revenues to the portfolio. It also offered the potential to generate significant operating and cost synergies and to accelerate the realization of Premier’s significant tax assets in the UK. The purchase of the E.ON portfolio reached payback in April 2017, earlier than anticipated as a result of stronger production and higher commodity prices.
Premier's portfolio is centered around 5 operated assets: the Catcher Area, Huntington, the Balmoral area, Solan and Tolmount in addition to non-operated interests in Elgin-Franklin, Kyle and the Southern North Sea.
Through the acquisition of E.ON's UK North Sea assets in 2016. Premier acquired a 50 per cent operated interest in the Greater Tolmount Area in the Southern Gas Basin. The Group sees the potential for the Greater Tolmount Area to contain up to 1 Tcf, including the fully appraised Tolmount main structure of 540 Bcf and upside at Tolmount East and Tolmount Far East, estimated to hold 220 Bcf and 150 Bcf of unrisked gas resource respectively.
In February 2017, the development concept comprising a standalone normally unmanned installation and a new gas export pipeline to shore was selected to develop Tolmount Main. FEED work was completed over the course of 2017 and the first half of 2018 with the project was sanctioned by the joint venture and infrastructure partners in August 2018. Premier's share of the capex to develop Tolmount Main is c. $120 million, comprising project management and development drilling costs. An infrastructure joint venture will own and pay for the platform and pipeline capex as well as pay for upgrades to the onshore terminal and, in return, Premier will pay a tariff for the use of the infrastructure. Premier continues to target firs gas in Q4 2020.
Premier’s exploration efforts in the UK North Sea will continue to focus on near-field prospects close to existing infrastructure. In particular, Premier will look to evaluate and mature its exploration acreage in the greater Tolmount area in the Southern Gas Basin with Tolmount East appraisal well expected to spud in 2019 1H. Premier continues to actively manage its UK exploration portfolio, exiting a number of licences including those with commitment well obligations at Ekland and Artemis.
The Infrastructure Code of Practice (ICOP) is a voluntary arrangement developed by Oil & Gas UK in consultation with DECC. Under the arrangement, operators have agreed to publish high level capacity, technical and commercial data about the pipelines and facilities that they operate on the UK Continental Shelf in order to facilitate the utilization of such infrastructure, by prospective third party users, for the development of remaining UKCS reserves.
For general inquiries regarding access to infrastructure operated by Premier please contact us via email.