Oil giant BP (LON:BP) sprung a surprise on Tuesday (January 7) by announcing the sale of some of its iconic North Sea assets to Premier Oil (LON:PMO), one of the U.K.'s most indebted oil and gas companies.

The deal worth 474 million ($625 million) will see a package of North Sea assets, including the Andrew platform and BP's controlling stake in five surrounding fields, as well as its minority stake in the Shell-operated Shearwater field, transferred to Premier Oil.

The five fields - Andrew, Arundel, Cyrus, Farragon and Kinnoull - all produce via the Andrew platform, which is about 140 miles (225km) north east of Aberdeen, and has been run by BP since 1994, coming onstream in 1996. The oil giant's minority stake in the Shell-operated Shearwater field stands at 27.5%.

The Andrew platform and BP's controlling stake in five surrounding fields, as well as its minority ... [+] stake in the Shell-operated Shearwater field will be sold to Premier Oil.

BP said the move was aimed at "reshaping" its North Sea asset portfolio under an ongoing 7.6 billion divestment program.

The sale marks a continuing trend of North Sea divestments by BP. In 2017, it sold its interests in the Bruce, Keith and Rhum fields to Serica Energy for 300 million. Earlier that year, the oil giant also sold its Forties Pipeline System (FPS) to Ineos in 250 million deal. The 235-mile pipeline system, which links 85 North Sea oil and gas assets belonging to 21 companies, was first opened in 1975.

BP is by no means alone in divesting mature North Sea assets. Rival Royal Dutch Shell (LON:RDSB) sold half of its U.K. production base to private equity-backed Chrysaor the same year as BP sold the FPS, and other majors such as Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP) have also divested from the region.

Ariel Flores, North Sea regional president at BP, said: "BP has been reshaping its portfolio in the North Sea to focus on core growth areas. As a result of this focus, we have also now decided to divest our Andrew and Shearwater interests, believing them to be a better strategic fit for another owner.

"We are confident that Premier Oil, already a significant operator in the North Sea, is the right owner of these assets as they seek to maximize their value and extend their life."

The midcap buyer of BP's assets is one of the most indebted oil companies in the U.K. with a debt pile of 1.5 billion. But Premier Oil said it would be paying for the assets via combination of existing cash, an acquisition bridging facility of 228 million and a fresh equity raise of 380 million.

Tony Durrant, Chief Executive of Premier Oil, said: "These acquisitions are in line with our stated strategy of acquiring cash generative assets in the UK North Sea.

"We look forward to realizing the significant long-term potential of the Andrew and Shearwater assets through production optimization, incremental developments and field life extension projects."

A total of 69 BP staff working on the divested assets are expected to move to Premier Oil. Following announcement of the divestment, as of 12:07 GMT on Tuesday, BP's shares were trading down 0.93% or 4.70p in London at 499.40p, while Premier Oil's were up 16.81% or 17.05p at 118.71p.

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BP Agrees To $625 Million Sale Of North Sea Assets With One Of U.K.s Most Indebted Oil Companies - Forbes

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