UK energy company Premier Oil said on Tuesday (6 April) it has signed a share purchase agreement with Al-Haj Energy to sell Premier Oil Pakistan Holdings BV for US$65.6 million.
The move was part of its strategy to dispose non-core assets and use the proceeds to reduce net debt.
Al-Haj, a local oil and gas explorer, has paid a deposit of $15 million and will pay a further interim deposit of $10 million within the next 60 days.
The transaction is subject to customary government and regulatory approvals and is expected to complete by year-end 2017.
Premier anticipates recording a book gain on disposal estimated at $40 million.
CEO Tony Durrant said although a non-core asset, the group's Pakistan business has consistently outperformed expectations over the years.
“This is testament to the hard work and skill of our team in Islamabad,” he said.
Premier has been present in Pakistan since 1988, and its business comprises non-operated equity interests in six gas producing fields.
In 2016, these fields generated net profit after tax of $19.8 million and production of 47.4 MMscf/d. The value of the gross assets attributed to Premier Oil Pakistan is $40.7 million as at 31 December 2016.
Scotiabank is acting as the sole financial advisor to Premier on this transaction.
Image: Map of Premier's gas fields in Pakistan / Premier