Chrysaor-Premier merger a win-win amid market challenges for both private equity backed and indebted listed E&P players, says GlobalData
Following the announcement that Chrysaor Holdings and Premier Oil have proposed to merge businesses;
Daniel Rogers, Oil and Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the announcement:
“With Premier Oil carrying a US$2bn debt load, and private equity players unable to execute high-value exit strategies through IPOs or divestments under current market conditions, this deal makes a lot of sense for both parties. With the stock price down over 80% from the start of the year, Chrysaor will take advantage of the depressed market value as an expansion opportunity and to list the combined businesses on the London Stock Exchange.
“The two companies will create a dominant North Sea player with production of around 250,000 barrels of oil equivalent per day and growth opportunities such as the Tolmount gas development - which GlobalData expects to boost the combined production to almost 270,000 boed in 2021. The merger will allow Chrysaor to expand its significant North Sea footprint with low-cost assets but will also gain exposure to producing assets in Indonesia and high-value development projects in South America. The combined entity will have a strengthened financial backing that should allow Premier’s pre sanctioned growth developments to move forward."
4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.