Premier Oil has agreed to pay $110m (£68m) to increase its stake in the Wytch Farm oil fields in Dorset, boosting its reserves at what it said was an inexpensive price.
Premier, which already owns 12 per cent of Wytch Farm, said yesterday it had exercised pre-emption rights to give it an additional 17.7 per cent interest in the assets, after the oil major BP agreed to sell its controlling stake to the unlisted French explorer Perenco.
The fields produce 13,000 barrels a day. Premier will pay $96m plus further payments of up to about $14.4m, dependant on government approval of development plans for the field.
Citigroup said it had valued the stake at $135m.
Some investors had expected Premier to buy the whole 68 per cent stake being sold by BP after its chief executive earlier this month said the company could exercise its pre-emption rights.