NEWS !! - Premier forms alliance, s

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Subject: NEWS !! - Premier forms alliance, secures funds

Premier forms alliance, secures funds

  
LONDON, Oct 1 (Reuters) - Premier Oil Plc on Friday signed an strategic
alliance with Amerada Hess Corp and Petronas that allows the British oil
and gas exploration and production group to develop its Asian gas
fields. 

The Alliance, which will involve Malaysian state oil company Petronas
taking a 25 percent stake in Premier, will provide Premier with 136
million pounds ($224.4 million) in much needed funds. 

Under the alliance terms, Petronas subscribes for 101.2 million pounds
of new equity at 25 pence per Premier share and U.S. oil company Amerada
Hess subscribes for 34.8 million pounds of new equity at the same price. 

The share price of 25 pence represents a premium of 27 percent to
Premier's closing mid-price of 19-3/4 pence the day before it set out
its alliance plans on September 23. 

At the time Premier shares rose 1-3/4 pence, or nearly nine percent to
reach 21-1/2 pence. On Friday they added a further 3/4 pence or 3.90
percent to trade at 20p, still well off their near 10 year high of
57-1/2 pence set in 1997 shortly before oil prices crashed. 

News of the alliance follows a dramatic year for the oil industry which,
under severe pressure from low oil prices, has seen the creation of
mega-mergers like BP Amoco and the merger of independents LASMO Plc and
Monument Oil & Gas. 

Premier Chief Executive Charles Jamieson told reporters in a conference
call that the alliance removed the need to sell assets or re-negotiate
its current borrowing requirements. 

Premier had looked at selling half its interest in Block A of
Indonesia's West Natuna gas project. But that option would now be
shelved, said Jamieson. 

``It solves the funding gap and allows us to realise the full value of
the portfolio we have built up,'' he said. 

It will enable Premier to pursue its 200 million pound investment
programme over the next 2-1/2 years, of which 130 million pounds has
already been earmarked for the West Natuna project, he added. 

Premier will also see cost-savings from services provided by Amerada and
Petronas, technology transfer, information exchange and reduced
overheads. 

Both Premier and Amerada have interests in the Yetagun gas field in
Myanmar as well as gas interests in Malaysia, Thailand and Indonesia.
Petronas has major interests in Malaysia and Vietnam. 

($1-.6060 Pound) 

08:10 10-01-99

Copyright 1999 Reuters