Premier Creditors Extend Debt Test Waiver

The creditors of UK producer Premier Oil have extended a waiver on its debt covenant test until November 5, the company said in a statement on October 1.

Covenant tests are used regularly by banks to check if a company's debt is less than three times its core earnings. Premier's net debt stood at just under $2bn at the end of June.

Premier is trying to get at least 75% of its creditors to back an extension of its debt maturities to 2025. In August it said it had convinced 45% of creditors to support the plan. It also wants to raise $530mn in fresh equity to clear some debt and fund the acquisition of a group of BP assets in the UK North Sea. 

Premier agreed revised terms for the purchase of BP's Andrew Area and Shearwater assets in July, reducing the initial purchase price almost threefold to $210mn. Reuters reported on September 23 that Premier was seeking a second price cut, although the company declined to comment on the matter to NGW.

The company is also in talks with Chrysaor and other parties on alternative financing options."Discussions continue relating to the proposed refinancing and possible alternative transactions," it said in its statement.