The company appears not to be cowed by a battle with its creditors as it pursues the acquisition. The purchases will include the Andrew Area oilfield and the Shearwater oilfield.
In addition, the company has proposed to buy an additional 25% of a third oilfield it already operates from Dana for $191m plus contingent payments of $55m.
In connection with the proposed acquisitions, Premier has also proposed an extension of its existing credit facilities to 30 November 2023.
The acquisitions will add roughly 23,000 barrels of oil a day to Premier's production and generate over $1bn of free cash flow to the end of 2023.
The transaction is being financed by a $500m equity raise, existing cash on the balance sheet and potentially some extra lending of $300m as required.
An accompanying trading update revealed a solid operational performance and news of a new partner on its Sea Lion project off the Falkland Islands, but there may be some frustration at the lack of updates on a sale of its Zama asset in Mexico.
This would provide an injection of funds to help address the company’s perilous financial position.
Hedge fund Asia Research and Capital Management (ARCM) has been buying up the company’s substantial debts and has built a short position of £130m in the company’s stock.
ARCM has responded to today's announcement saying: 'As the company’s largest creditor, holding more than 15% across the company’s debt instruments with blocking positions in two of them, ARCM will take all steps to oppose the company’s proposal and will vigorously contest any attempt to implement such proposal via a scheme of arrangement.'
Premier's net debt is just below $2bn, having been reduced by $330m over the course of 2019.
Commenting on the BP deal, Cantor Fitzgerald says: ‘Looks a sensible deal for Premier, which will add significant cash flow generating production and reserves (plus some upside) at a decent price.
'All looks good on the operational front as well (although the lack of news on the Zama sale is a tad disappointing), while the Sea Lion farm-down should be very well received, to boot.’