KARACHI: Premier Oil plc is selling its Pakistan business for $65.6 million in line with its strategy to dispose of non-core assets.

It has signed a share-purchase agreement with Al-Haj Energy Ltd for the sale of Premier Oil Pakistan Holdings BV.

“We are pleased to have reached agreement to sell our Pakistan business,” Premier Oil CEO Tony Durrant said, according to a press release issued by the company on Wednesday. “While now non-core for Premier, our Pakistan business has consistently outperformed our expectations over the years and this is testament to the hard work and skill of our team in Islamabad,” he said.

Premier Oil — an independent UK oil company with gas and oil interests in Britain, Asia and Africa — anticipates recording a book gain on disposal estimated at $40m.

Al-Haj has paid a deposit of $15m to Premier and will pay a further interim deposit of $10m within the next 60 days. Scotiabank is acting as sole financial adviser to Premier on this transaction.

Premier will use the proceeds from the sale to reduce its net debt. Economic date of transaction is Jan 1, 2017, with premier retaining 2016 net cash flows.

Premier’s Pakistan business comprises non-operated equity interests in six gas producing fields in Pakistan. In 2016, these fields generated net after-tax profit of $19.8m, including a one-time non-cash gain of $5.7m in relation to the Kadanwari field, according to the company.

The value of the gross assets attributed to Premier Oil Pakistan Holdings BV was $40.7m on Dec 31, 2016, it said.

Published in Dawn, April 6th, 2017