Wednesday 14 October 2015

Det norske oljeselskap has entered into an agreement to acquire Svenska Petroleum Exploration AS («Svenska») for a cash consideration of USD 75million on a cash free, debt free basis.

Svenska has 15employees in Norway, of which all will be transferred to Det norske.

Svenska holds 13 licenses in Norway, including the Krafla/Askja (25%), Garantiana (20%), Frigg Gamma Delta (40%) and Fulla/Lille-Frigg (25%) discoveries in the North Sea. In addition, the company holds four exploration licenses in the Norwegian Sea.

"This transaction states our ambition of growth on the Norwegian Continental Shelf, and is a solid contribution to building Det norske as an independent E&P company. This increases our ownership in attractive discoveries with resource upside potential and is a logical bolt-on acquisition for Det norske, given the overlap in our asset portfolios", says Karl Johnny Hersvik, Chief Executive Officer of Det norske.

Potential investment decisions on the Krafla/Askja and Garantiana discoveries are expected around 2018.

"The acquisition fits very well in our existing portfolio as investments decisions on the these new developments will occur after start-up of Ivar Aasen and the majority of the CAPEX will thus be funded by Johan Sverdrup cash flow", says Hersvik.

The transaction will be funded through existing cash and undrawn debt facilities.

The transaction will have tax effect from the fiscal year 2015. At the end of 2014, Svenska held a tax loss carry forward equal to an after-tax value of approximately NOK 130 million, which is expected to be offset against Det norske's taxes paid for the fiscal year 2015.

The transaction is expected to close in the first quarter 2016, subject to regulatory approvals.

Press Release