Aker BP

M&A Activity • Jun 10, 2016

Det norske oljeselskap and BP Norge merge to create a leading independent E&P company on the NCS

Det norske oljeselskap and BP Norge merge to create a leading independent E&P company on the NCS

(Trondheim, 10 June 2016) 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. 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.

"We have been in close dialogue with Folketrygdfondet, Det norske's second

-largest shareholder, which supports the transaction. From our start as an

exploration company, we have developed the company into a fully-fledged E&P.

With BP, we are taking another leap forward with the creation of Aker BP," says

Eriksen.

The transaction will strengthen Det norske´s balance sheet and is credit

accretive through a 35% reduction in net interest-bearing debt per barrel of oil

equivalent of reserves. Aker BP aims to introduce a quarterly dividend policy.

The first dividend payment is planned for the fourth quarter of 2016,

conditional upon the approval of creditors.

"BP and Aker have matured a close collaboration through decades, and we are

pleased to take advantage of the industrial expertise of both companies to

create a large independent E&P company. The Norwegian Continental Shelf

represents significant opportunities going forward and we are looking forward to

working together with Aker to unlock the long term value of the company through

growth and efficient operations. This innovative deal demonstrates how we can

adapt our business model with strong and talented partners to remain competitive

and grow where we see long-term benefit for our shareholders," says Bob Dudley,

Group Chief Executive of BP.

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.

"Aker BP will have a balanced portfolio of operated assets and a high quality

inventory of non-sanctioned discoveries. The company has potential to reach a

production above 250,000 barrels of oil equivalent per day in 2023," says Karl

Johnny Hersvik, Chief Executive Officer of Det norske.

Aker BP has the ambition to leverage on a lean and nimble business model and

will gain access to state-of-the-art technological know-how and capabilities,

through the industrial collaboration with BP.

"We will implement simple processes across the combined entity, and build a fit

-for-purpose organisational structure, with corresponding capacity and

competence from both organisations. We expect to realise significant cost cuts

and synergies, which will be implemented in close cooperation with employees and

suppliers," says Hersvik.

Øyvind Eriksen will remain Chairman of the Board of Directors and Karl Johnny

Hersvik Chief Executive Officer of the combined company.

A presentation of the transaction is enclosed.

The transaction is subject to approval by the relevant Norwegian and European

Union authorities. An extraordinary general meeting of Det norske will be

scheduled to approve the transaction.

BAHR and Arctic Securities has acted as advisors to Det norske on the

transaction.

Facts about BP Norge:

+----------------------------------------+----------------+

|Proved plus probable reserves (end 2015)|225 mmboe |

+----------------------------------------+----------------+

|2015 net average production |62,100 boe/day |

+----------------------------------------+----------------+

|Number of licenses |13 |

+----------------------------------------+----------------+

|Number of employees (end 2015) |870 |

+----------------------------------------+----------------+

|2015 total revenues |NOK 7.9 billion |

+----------------------------------------+----------------+

|2015 total assets |NOK 23.5 billion|

+----------------------------------------+----------------+

|2015 free cash flow |NOK 2.5 billion |

+----------------------------------------+----------------+

Facts about Det norske:

+----------------------------------------+----------------+

|Proved plus probable reserves (end 2015)|498 mmboe |

+----------------------------------------+----------------+

|2015 net average production |60,000 boe/day |

+----------------------------------------+----------------+

|Number of licenses (end 2015) |84 |

+----------------------------------------+----------------+

|Number of employees (end 2015) |530 |

+----------------------------------------+----------------+

|2015 total revenues |USD 1.2 billion |

+----------------------------------------+----------------+

|2015 total assets |USD 5.2 billion |

+----------------------------------------+----------------+

|2015 free cash flow |USD -0.5 billion|

+----------------------------------------+----------------+

Investor and analyst call

Det norske, BP and Aker will host an investor and analyst call at 08:00 CET 10

June 2016.

Participant Access - Dial in 5-10 minutes prior to the start time using the

number / Confirmation Code below.

Confirmation Code: 3804762

Local - Oslo, Norway: +472350 0486

National free phone - Norway: 800 56053

National free phone - United States of America: 1877 280 2296

Local - New York, United States of America: +1646 254 3388

National free phone - United Kingdom: 0800 279 5736

Local - London, United Kingdom: +44(0)20 3427 1919

National free phone - United Kingdom: 0800 279 4977

Press conference

Det norske, BP and Aker will host a press conference at 10:00 CET 10 June 2016:

Venue: Fornebuporten building B, Oksenøyveien 10, Lysaker

Language: English

Webcast: A live webcast is available from 10:00 CET at www.detnor.no/en.

Contacts:

Investor contact: Jonas Gamre, VP Investor Relations, tel.: +47 971 18 292

Media contact: Rolf Jarle Brøske, SVP Communications, tel.: +47 911 12 475

About Det norske:

Det norske is a fully-fledged E&P company with exploration, development and

production activities on the Norwegian Continental Shelf. Det norske is the

operator of the producing Alvheim field and for the Ivar Aasen field

development. In addition, the company is partner in the Johan Sverdrup field.

Det norske has an active exploration programme on the Norwegian shelf and an

ambitious strategy for growth. Det norske is listed on Oslo Børs with ticker

'DETNOR'. More about Det norske at www.detnor.no/en/

About BP:

Headquartered in London, BP is one of the world´s largest integrated oil and gas

companies with operations in more than 70 countries. BP Norge has been active on

the Norwegian continental shelf since 1965 and operates five producing fields

comprised of 13 platforms and one floating, production, storage and offloading

vessel. The five fields are the Skarv field in the Norwegian Sea and Valhall,

Hod, Ula and Tambar in the North Sea. Headquartered in Stavanger, BP Norway had

approximately 870 employees at the end of 2015.  More about BP at www.bpcom/no.

This information is subject to disclosure requirements pursuant to section 5-12

of the Norwegian Securities Trading Act.