Premier Oil plc (PMO LN) Oil & Gas – Exploration & Production

Investment Thesis
Although we see risks as now skewed to the upside, our cautious view on Premier is due to near-term uncertainty around the terms of the required debt and equity financing processes.
● Completion of the BP asset acquisitions would be positive for Premier, in our view. It would add cash-generative production to the portfolio and enhance the company’s ability to reduce its net debt burden. In addition to the asset value, Premier’s NAV would be improved through accelerated utilisation of its tax loss pool.
● Completion and oil price could unlock further upsid Completion and oil price could unlock further upside: etion and oil price could unlock further upside:In the event the deal is completed and oil prices continue to firm, Premier may be able to unlock value in the remainder of the portfolio, including progressing the Zama disposal, additional resource development around Tolmount, and potentially moving to secure funding for the Sea Lion development.
● Valuation methodology: Valuation methodology: Our price target is set using a risked NAV methodology that focuses on Premier’s producing fields net of financials (core NAV), as well as risked development assets.