M&A Activity • Jun 4, 2014
M&A Activity
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Trondheim 4 June 2014
Reference is made to announcement made on 2 June 2014. This announcement is drafted and published in accordance with section 3.4 of the Continuing Obligations for listed companies.
On 1 June 2014, Det norske oljeselskap ASA ("Det norske") entered into a sale and purchase agreement (the "SPA") with Marathon Norway Investment Coöperatief U.A. (the "Seller") regarding the acquisition of all the shares of MarathonOil Norge AS ("Marathon Norway"). The Seller is a wholly-owned subsidiary of MarathonOil Corporation and MarathonOil Corporation is a party to the SPA as Seller's guarantor.
Under the SPA, Det norske will acquire all the shares of Marathon Norway for an agreed purchase price of approximately USD 2.1 billion cash on completion (the "Transaction"). Marathon Norway is the operator onAlvheim and holds interests in both producing fields and fields under development in the Alvheim area. Marathon Norway had a 2013 production of around ~80,000 barrels of oil equivalents per day (boepd) and had proved and probable reserves of 136 million barrels of oil equivalents at year-end 2013.
Det norske has secured a fully committed and underwritten acquisition loan facility for the full cash consideration. This facility has been provided by BNP PARIBAS, DNB, Nordea and SEB. The company has mandated and is in advanced discussions with the same four banks to finalise a seven-year Reserve Based Lending facility of USD 2.75 billion. This long-term facility will replace the acquisition loan and refinance Det norske's current facilities. As an integral component of the long-term financing plan, the company will strengthen its equity base by issuing the NOK equivalent of USD 500 million in new equity through a rights issue. The company's largest shareholder Aker Capital AS has pre-committed to subscribe for its 49.99% pro rata share of such rights issue. The remaining 50.01% is fully underwritten by a consortium of banks. With this equity issue, the company has secured the financing of its current work program until first production from the Johan Sverdrup field.
The closing date for the Transaction is expected to occur in the fourth quarter 2014. Completion of the Transaction is subject to standard conditions, including approval by the Norwegian Ministry of Petroleum and Energy and the Norwegian Ministry of Finance, and the European Union competition authorities.An extraordinary general meeting of Det norske will be scheduled for late June to approve the rights issue.
As of 31 December 2013, MarathonOil Norge AS had 218 employees. No redundancies are expected as a result of the Transaction. The Board of Directors of MarathonOil Norge AS currently consists of R. N. M. Miller (Chairman), K. M. Woodworth (Deputy Chairman), G. Solli, T. M. Little, C. L. Jensen, K.Alne and H. Haslerud. The Managing Director of MarathonOil Norge AS is Ken Woodworth. Geir Solli is the Deputy Managing Director.
After the Transaction, Det norske will have approximately 450 employees and have 202 million barrels of oil equivalents (boe) of 2P reserves. The plan for development and operation for Johan Sverdrup, scheduled for submission in February 2015, will increase reserves significantly. In addition, the combined company will have contingent resources amounting to 101 million boe, excluding Johan Sverdrup. Further identified upside in Marathon's portfolio is estimated at approximately 80 million boe. Combined 2013 production for the two companies amounted to approximately 84,000 boepd, making Det norske one of the largest listed independent E&P companies in Europe in terms of output.
Marathon Norway represents an excellent strategic fit for Det norske. Its portfolio of quality assets comes with limited capital expenditure commitments, low historic tax balances and high near-term production that complement the planned production start of Det norske's Ivar Aasen and Johan Sverdrup developments. Marathon Norway's organisation brings significant operational experience from the Alvheim fields, which adds to Det norske's exploration and development capabilities. Marathon Norway's assets are geographically focused and are all producing through the Alvheim FPSO that boasts a robust operating track record. Furthermore, the company's assets are oil rich (80% of the reserves are oil).
J.P. Morgan Limited acted as financial advisor to Det norske on this transaction.
MarathonOil Norge AS had total revenues of NOK 18.7 billion in 2013 and a pre-tax profit of NOK 13.7 billion. Further financial figures are included in the attachment.
For more information, please contact:
Press contact: Torgeir Anda, VP Communication, tel.: + 47 99 11 22 03
Investor contact: Jonas Gamre, Investor Relations Manager, tel.: +47 971 18 292
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. *********
This announcement is not an offer for sale of securities in the United States or any other country. The securities referred to herein have not been registered under the U.S. SecuritiesAct of 1933, as amended (the "U.S. SecuritiesAct"), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S. SecuritiesAct. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States.Any offering of securities will be made by means of a prospectus that may be obtained from the Company when the subscription period commences and that will contain detailed information about the Company and management, as well as financial statements. Copies of this announcement are not being made and may not be distributed or sent into the United States, Canada,Australia, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.
In any EEAMember State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any member State, the "Prospectus Directive"), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.
This announcement is only directed at (a) persons who are outside the United Kingdom; or (b) investment professionals within the meaning ofArticle 19 of the Financial Services and MarketsAct 2000 (Financial Promotion) Order 2005 (the "Order"); or (c) persons falling withinArticle 49(2)(a) to (d) of the Order; or (d) persons to whom any invitation or inducement to engage in investment activity can be communicated in circumstances where Section 21(1) of the Financial Services and MarketsAct 2000 does not apply.
Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management's plans, objectives and strategies for the Company, such as planned expansions, investments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in the Company's markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, as well as (i) statements preceded by "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar statements.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized.
No assurance can be given that such expectations will prove to have been correct. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise.
J.P. Morgan Limited is acting for Det Norske, and no one else, in relation to this transaction and shall not be responsible to any person other than Det Norske for providing protections afforded to clients of J.P. Morgan Limited or for advising any other person involved in the transaction.
Det norske oljeselskap ASA (DETNOR) is an active exploration company on the Norwegian Continental Shelf. Det norske's headquarters is in Trondheim. The company also has offices in Oslo and Harstad. Det norske is listed on the Oslo Stock Exchange with the ticker "DETNOR". More about Det norske at www.detnor.no/en/
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