Premier Oil says it will sell its operations in Pakistan for $66m in cash as the company tries to cut its debt.
The business is to be sold to Al-Haj Group, a Pakistani conglomerate with interests in logistics, energy, carmaking and textiles.
Premier said the move was part of its strategy to dispose of non-core assets and the proceeds would be used to cut its debt.
The oil and gas explorer has net debt of £2.2bn, compared with Ebitda in 2016 of £475m. Premier said the economic date of the deal was January 1 of this year and that it would retain 2016 cash flows only. The company said it expected to record a book gain on disposal of $40m.
Chief executive Tony Durrant said:
We are pleased to have reached agreement to sell our Pakistan business. While now non-core for Premier, our Pakistan business has consistently outperformed our expectations over the years and this is testament to the hard work and skill of our team in Islamabad.
Scotiabank is advising Premier on the deal, which is expected to complete by the end of this year subject to regulatory and government approval.