Oil & Gas: Significant merger between Det norske and PB Norge
Det norske oljeselskap ASA (Det norske) has entered into an agreement with BP p.l.c. (BP) to merge with BP Norge AS (BP Norge) through a share purchase transaction, to create the leading independent offshore E&P company.
In a press release, the new company says that the transaction will significantly strengthen the combined company’s operations, cost efficiency and growth potential, enabling the company to initiate dividend payment. The company will be named Aker BP ASA (Aker BP) and will be headquartered at Fornebuporten, Norway, with Aker ASA (Aker) and BP as main industrial shareholders.
“We are proud to announce this merger to create Aker BP, the leading independent offshore E&P company. Aker BP will leverage on Det norske’s efficient operations, BP’s International Oil Company capabilities and Aker’s 175 years of industrial experience. Together, we are establishing a strong platform for creating value for our shareholders through our unique industrial capabilities, a world-class asset base and financial robustness. We look forward to taking advantage of the attractive growth potential on the Norwegian Continental Shelf through this industrial partnership with BP and to deliver on Aker BP’s dividend story,” says Øyvind Eriksen, Chairman of the Board of Directors in Det norske.
Aker BP will be jointly owned by Aker ASA (40%), BP (30%) and other Det norske shareholders (30%). As part of the transaction, Det norske will issue 135.1 million shares based on NOK 80 per share to BP as compensation for all shares in BP Norge, including assets, a tax loss carry forward of USD 267 million (nominal after-tax value) and a net cash position of USD 178 million.
In parallel, Aker will acquire 33.8 million shares from BP at the same share price to achieve the agreed-upon ownership structure.
Aker BP will hold a portfolio of 97 licenses on the Norwegian Continental Shelf, of which 46 are operated. The combined company will hold an estimated 723 million barrels of oil equivalent P50 reserves, with a 2015 joint production of approximately 122,000 barrels of oil equivalent per day. Det norske and BP had at the end of 2015 a combined workforce of approximately 1,400 employees.