A merger which would have created another UK oil and gas major has now been ruled out.
Ophir Energy yesterday confirmed weekend reports that it had made two bids to Premier Oil in an attempt to form a new £3billion firm.
Both were rejected by Premier, whose assets include the Balmoral area fields as well as interests in the Huntington, Scott and Telford fields in the UK North Sea.
It is understood that the final all-share merger proposal was unanimously turned down by Premier’s board a fortnight ago because it was not considered to offer a good strategic fit.
Yesterday, Ophir told the stock market that the deal was dead.
“Further to recent press speculation, Ophir confirms that it recently made an approach to the board of Premier with an indicative proposal to merge the two businesses,” a spokesman said.
“The Ophir board believed that merging the two businesses provided the potential to create a well-funded, refocused, full cycle exploration and production company.
“However, the proposal was subsequently rejected by the Premier board.
“Ophir confirms that it is no longer considering making an offer for Premier.”
Combining Premier and Ophir would create a firm operating from east Africa to Asia to the North Sea and the Falklands.
It would be the fifth largest oil and gas explorer listed in London, behind BP, Shell, BG Group and Tullow Oil.
Ophir, led by former Goldman Sachs banker Nick Cooper, made its first bid approach in February, days after Premier announced that its chief executive, Simon Lockett, would be stepping down after nine years in the role.
Meanwhile, Premier confirmed yesterday that tests on its Kuda Laut-1 well offshore Indonesia discovered both gas and oil.
The well contains 183ft of net oil-bearing reservoir and 327ft of net gas-bearing reservoir.
After evaluation operations are complete, the well will be side-tracked to drill the Singa Laut prospect in the adjacent fault block. The results of both wells will be incorporated and assessed later this year.