Premier Oil to Acquire 60% Interest in North Falkland Basin Licenses from Rockhopper Exploration for $1 Billion to become Operator of Sea Lion FPSO Development

Pages: 6 Published: July 01, 2012 Report Code: GDGE0395M&A

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Premier Oil PLC (Premier Oil) agreed to acquire 60% interest in the North Falkland basin licenses from Rockhopper Exploration PLC (Rockhopper) for a purchase consideration of $1 billion. The company will fund the acquisition cost from a combination of its existing cash resources, facilities and cash flow from operations. The total exploration carry cost is estimated to be $120m ($48m for Rockhooper and $72m for Premier Oil) and total development cost for Sea Lion project is $1,800m ($722m for Rockhooper and $1,078m for Premier Oil). Under the terms of the agreement, Premier Oil will initial pay $231m in cash plus an exploration carry of up to $48m of Rockhopper's share, subject to field development plan approval, a Rockhopper’s Sea Lion development carry of up to $722m. Additionally, Premier Oil agreed to provide standby financing arrangement at Rockhopper’s option to cover development expenses beyond the $722m. Following the transaction, Premier Oil will become the operator of the Sea Lion oil and gas development in the South Atlantic. The completion of the transaction is subject to approval from the Falkland Islands government. The transaction implies deal value of $5 per boe of contingent resources and $5.71 per boe of recoverable reserves.

Scope

Rationale behind Premier Oil's plan to acquire 60% interest in North Falkland Basin Licenses

Geography covered – Falkland Islands

Reasons to Buy

Develop a sound understanding of the Premier's plan of investing in North Falkland basin, issues and challenes in the region.

Rationale behind the company's plan to acquire 60% interest in the North Falkland basin.

Table of Contents

N/A

List of Tables

1 Table of Contents

1 Table of Contents 1

1.1 List of Tables 1

1.2 List of Figures 1

2 Premier Oil to Acquire 60% Interest in North Falkland Basin Licenses from Rockhopper Exploration for $1 Billion 1

2.1 Deal Overview 1

2.2 Deal in Brief 1

2.3 Premier Oil’s Expertise in Operating FPSOs Makes it an Apt Choice for Sea Lion FPSO Project 2

2.4 Rockhopper to Farm Out its Stake in North Falkland Basin Licenses to Fund Sea Lion Project and Further Exploration Activities 4

2.5 The Announcement has Spurred Tension between Argentina and the UK regarding the Claim to the Archipelago 5

2.6 Deal Financials and Valuations 5

3 Appendix 6

3.1 Methodology 6

3.2 Contact Us 7

3.3 Disclaimer 7

List of Figures

1.2 List of Figures

Figure 1: Sea Lion FPSO Development, 2012 2

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