-BP's North Sea assets sale to Premier Oil amended to reflect lower commodity prices

-Premier Oil says assets are cash generative even under current conditions

-Premier's largest creditor agrees to withdraw appeal against debt plan and support the acquisition

By Jaime Llinares Taboada

BP PLC has agreed to revise the terms of a sale of North Sea assets to Premier Oil PLC following the plunge in oil-and-gas prices this year.

Under the new deal Premier will pay BP $210 million upon completion with a further $115 million based on future oil-and-gas prices, instead of the one-time payment of $325 million previously agreed.

BP will also retain $300 million in interim cash flows, keeping the potential total value of the deal at $625 million as agreed in January.

The deal was also changed to reduce Premier's field abandonment expenses to $240 million from $600 million.

The changes were supported by Premier's largest creditor Asia Research Capital Management which has agreed to invest in the business. ARCM will be issued with 82.4 million Premier shares at 26.69 pence each and the money raised will part-fund the acquisition and ongoing capital investments.

ARCM will use the shares to reduce the short-selling position it had built up of 16.69% in Premier and has agreed to withdraw its appeal against the group's credit schemes.

Premier Oil said the terms were changed due to "material developments in global commodity markets". Near term WTI and Brent contracts for crude oil are down nearly 40% since 2020 began.

It added that the revised terms agreed with BP are in principle and there's no certainty any deal will take place. The assets being bought--Andrew Area and Shearwater--are immediately cash generative even at current commodity prices, Premier said.

In addition, Premier Oil said it is discussing with a subset of creditors to waive financial covenants through September 30 and to provide continued access to revolving credit facilities.

Shares of Premier Oil at 1332 GMT were up 21% at 38.44 pence. BP was up 6.1% at 356.60 pence, with energy stocks gaining on hopes of an international agreement to extend oil-production cuts.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

June 05, 2020 10:23 ET (14:23 GMT)