Premier Oil, the independent oil and gas exploration business, yesterday admitted it was a bid target after agreeing a (pounds) 443m ($670m) deal to change its ownership structure and dispose of its two biggest investors.

The deal sparked life into the share price of the business, which also posted a 23% rise in first-half profits. Analysts said that in the long term its days as an independent oil business were numbered.

Under the deal, which was widely trailed, Amerada Hess and Petronas, the Malaysian state oil business, are giving up their combined 50% stake in the UK firm.

In return for cancelling their shares, the pair will also pay cash and assume debt in exchange for some of Premier's key assets in the politically controversial areas of Myanmar - formerly Burma - and Indonesia.

The deal removes the burden of a complex ownership structure which had been seen as an

obstacle to any takeover bid, and frees the company from becoming entangled in south-east Asian political issues.

It also cuts Premier's debts from (pounds) 135m to (pounds) 111m and reduces its production from 50,000 barrels of oil equivalent per day (boepd) to some 30,000-35,000 boepd.

Charles Jamieson, chief executive, said the complex deal had taken a year to negotiate. Around (pounds) 8m was spent on advisers' fees and other costs associated with the transaction. He insisted that the decision to exit Burma, whose questionable human rights record has meant that Premier has been targeted by human rights groups, was purely a ''commercial decision''.

Jamieson admitted, however, that Burma has ''pariah status'', which meant it was difficult to sell on any assets which are linked to that country.

The ownership structure dates from 1999 when Premier sold the stakes to secure financing amid mounting debts and weak oil prices. Settlement of the issue forced Premier's shares up 6% to close at 25p, with some analysts forecasting the company's price could hit 30p by early next year when the transaction completes.

Jamieson admitted that a bid premium would now be factored into the share price.

He said: ''It has been a traditional way to collect value, so they like to have that element in the share price. We run the business to extract maximum value and if someone offers money, we will put it to shareholders.

''But no-one has rung up this morning and said: 'Here's 50p'.''

Richard Slape, an analyst at Charles Stanley, said a bid was more likely in the medium term. He said: ''There is no prospect this side of Christmas, but the principle is correct. The protection has been stripped away.''

Tony Alves, an analyst at Investec, said larger independents such as Edinburgh-based Cairn Energy were likely to make a bid. At yesterday's close the company was valued at (pounds) 202m plus debt.

Premier, which will continue to operate in Britain, Pakistan and Indonesia, also reported strong net profits up 23% to (pounds) 15.3m for the six months to June 30, helped by a 42% jump in production.