Completion of Strategic Review of North Sea E&P Business – divestiture of UK Exploration & Production Business to Premier Oil

By ScottSomerville

  • E.ON to sell its UK E&P business to Premier Oil

  • Transaction is the logical second step of the strategic
    review of the E&P North Sea business and further reinforces E.ON´s
    financial flexibility

  • Strategic review of E.ON’s E&P North Sea business is
    hereby completed

    E.ON has signed
    an agreement to sell 100 percent of its shares in its UK E&P Subsidiaries
    to Premier Oil. The transaction value is $0.12 billion as at the effective date
    of January 1
    st 2015. As a result of the transaction,
    E.ON will also release provisions for asset retirement obligations
    (decommissioning obligations) associated with the business of $0.45 billion as
    well as realizing $0.05 billion of value for other adjustments, including the
    2015 hedge positions. The transaction will therefore have a total Economic Net
    Debt Impact to E.ON of $0.62 billion. In addition, E.ON will retain cash of
    approximately $0.15 billion which existed at the effective date.

    E.ON placed its
    North Sea E&P business under strategic review in November 2014. The UK oil
    and gas upstream portfolio comprises equity interests in 40 licenses, including
    a 5.20 percent interest in the Elgin-Franklin field, 47.00 percent interest in
    the Babbage field and a 50.00 percent interest in the Tolmount discovery. The
    divestment of E.ON E&P UK represents the second and final step in E.ON´s
    review process of the Exploration & Production North Sea business,
    following the sale of the Norway E&P business which concluded in December
    2015.

    E.ON CFO
    Michael Sen said: “The successful sale of our E&P business in the UK
    represents the final step of the strategic review, with all E.ON E&P North
    Sea assets having now been divested. This transaction further strengthens our
    financial profile and provides flexibility to implement our strategy and to reposition
    the Group. The outcome demonstrates that E.ON E&P is a high performing
    business with a strong asset base and superbly professional employees. Premier
    has a long history in the UK and I am convinced that the company will continue
    to build on this success story in the future. I want to thank all E.ON E&P
    UK employees for the excellent work they have done as part of E.ON.”

    The transaction
    is subject to customary regulatory approvals as well as Premier Oil shareholder
    and lender approval and is expected to be closed in the first half of 2016.

    Background

    Premier Oil

    Premier Oil
    plc, founded in 1934 and headquartered in London, is a leading independent
    exploration and production company with significant oil and gas interests and
    operations in the North Sea, South East Asia, Pakistan and the Falkland
    Islands. The company produces around 60,000 boepd and it has an existing
    portfolio of producing, development and exploration opportunities. As at
    December 31, 2014, it had reserves and resources of around 800 mmboe.

Further media information:

Scott Somerville (07889 771 804)

This press
release may contain forward-looking statements based on current assumptions and
forecasts made by E.ON Group Management and other information currently
available to E.ON. Various known and unknown risks, uncertainties and other
factors could lead to material differences between the actual future results,
financial situation, development or performance of the company and the
estimates given here. E.ON SE does not intend, and does not assume any
liability whatsoever, to update these forward-looking statements or to conform
them to future events or developments.

Source:: Completion of Strategic Review of North Sea E&P Business – divestiture of UK Exploration & Production Business to Premier Oil

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