Premier slips on oil spill as financing reports hit share price
Premier Oil tried to calm stormy markets today as its shares dropped as much as 12.5 per cent after reports it was considering issuing more shares to buy oil fields in the North Sea.
The company said it was looking at potential sites in the UK, but stressed it had not yet decided to bid on the around £1.5bn in assets which Chevron has put up for sale.
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The statement came after a report in yesterday’s Sunday Times which claimed the debt-riddled firm was planning to go cap in hand to shareholders to raise money for the deal.
The firm was briefly the biggest loser on the FTSE 250 as it dropped by as far as 69.55p, shares later recovered to 73.2p, a 7.9 per cent decrease on Friday’s close.
“No firm decision has been taken to bid for all or any of the assets currently being marketed by Chevron and how, in the event that the group were to be successful, the acquisition of such assets would be financed,” Premier Oil said in a note to investors.
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The company is also mulling over options for its Latin American business, and could decide to sell part or all of it to help fund the North Sea oil deals, the Sunday Times reported.
The company cut debt to $2.3bn at the end of last year, beating estimates of $2.4bn.