Premier Oil pays BP £70m to up its stake in Dorset field

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For its money, Premier's interest in the site will be boosted from 12.4% to a total of 30.1%. It will pay $96million in cash, and up to another $14.4million depending on whether the field's development plans receive approval from the Government.

The deal came about after Premier exercised its right to pre-empt BP's sale of its controlling stake in Wytch Farm - part of its fire sale to pay for the clean-up costs of the Gulf of Mexico oil disaster. BP is selling the rest of its stake to France's Perenco, which will own 50.1% of the field and become its operator.

Simon Lockett, Premier's chief executive, said: "We are pleased to have this opportunity to increase our equity stake in one of our quality core producing assets to over 30% We look forward to working with Perenco to deliver maximum value from Wytch Farm."

Lockett also claimed the deal would allow Premier to make "efficient use of Premier's large existing pool of tax allowances".

Premier hired Deutsche Bank as an adviser to the deal.