Premier Oil Announces Proposed Refinancing Part – I

Premier Oil Announces Proposed Refinancing Part – I

Premier is pleased to announce:

  • Agreement of representatives of its Private Lenders to a long form term sheet, subject to credit approvals
  • Agreement of revised key terms between Premier and representatives of its convertible bondholders, subject to agreement by the Private Lenders
  • Proposed amended terms to its retail bonds

Refinancing overview

The Oil refinancing will provide a solid foundation for Premier to deliver its strategic plans through:

  • Preserving the Group’s debt facilities
  • Resetting financial covenant headroom
  • Extending Premier’s debt maturities to 2021 and beyond

In return, the lenders will receive a revised security and covenant package, enhanced economics and certain governance controls. The long form term sheet will now be circulated to  the lenders under the company’s RCF, term loan, Schuldschein and US Private Placement notes (Private Lenders) for formal credit committee approval, with lock-up agreements requested by the end of February. Revised financing documentation will now be finalized with completion of the refinancing currently anticipated by the end of May 2017.

Revised funding structure allows for debt reduction and growth

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Year-to-date Premier’s production has averaged around 80 kboepd. A significant step up in production is expected once Catcher is on-stream later this year, materially enhancing the Group’s cash flows.  The Group will priorities these cash flows towards reducing its absolute debt levels and leverage ratio to 3x EBITDA.  At the same time, Premier and its lenders envisage that the Group will selectively seek to invest in its unsanctioned projects, at the appropriate equity levels, with due regard to the commodity price environment.

With rising production and 700 mmboe of discovered but undeveloped reserves and resources, Premier has considerable portfolio optionality. Unsanctioned projects include infill drilling programmers, incremental developments and new projects such as Tolmount, Tuna and Sea Lion. Premier also has the potential for material value creation through its exploration acreage, including in Mexico, with drilling expected to commence in Q2.

Tony Durrant, CEO, commented

“The agreement of the long form term sheet with representatives of our Private Lenders marks a significant milestone for Premier. We are grateful for our lenders’ continued support, which reflects the high quality nature of our asset base, the strong recent operating performance and our plans to deliver value for all of our stakeholders.”

Part – II