Premier Oil is set to buy stakes in North Sea oilfields Andrew and Shearwater from BP for $625m and increase its stake in the Tolmount gas project in a deal with Dana worth $191 million, it said today. 

Premier said the acquisitions would generate more than $1 billion in free cash flow by the end of 2023.

It will also push its output above 100,000 barrels of oil equivalent per day by next year and add 82 million barrels of reserves and resources to its portfolio. 

The acquisitions are funded by a $500m equity raise "which has been fully underwritten on a standby basis", existing cash and, if needed, a loan of $300m. 

Premier's shares shot up around 11% to their highest in over a year in London trade. 

Chief executive Tony Durrant told Reuters the response from major shareholders for the plans was "extremely positive". 

The group added it expected to confirm the structure of the issue in the first quarter. 

It also said it had extended its debt maturity timeline by over two years to the end of November 2023. 

Premier, which had a market capitalisation of around $1.1 billion before the announcements, has a debt pile of around $2 billion.

Hedge fund ARCM, which has had a growing short position in Premier shares since 2017 reaching around 17% of the oil group's stock, around four times higher than the average for London-listed firms, objected to the plans. 

ARCM has described itself as Premier's largest creditor at 15% of its debt instruments.

It said it would "take all steps" to oppose the deals, objecting to Premier's focus on North Sea gas assets amid strong Russian and US gas imports. 

In a string of announcements today, Premier's partner in the Sea Lion project off the Falklands Islands, Rockhopper, said they had signed a preliminary deal for Navitas Petroleum to buy a 30% stake. 

The new partnership will reduce Premier's obligations to build Sea Lion to around $285m from $500m, Durrant said.