AKER BP ASA ACQUISITION OF HESS NORGE AS
24 October 2017
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AKER BP ASA Transaction summary: Acquisition of Hess Norge AS
Consideration
- Total cash consideration of USD 2.0 billion
- After-tax value of tax loss carry forward of USD 1.5 billion*
- Effective date 1 January 2017
Financing
- Existing long-term Reserve Based Lending bank facility
- New equity of USD 500 million, subject to EGM
- Aker ASA (40%) and BP plc (30%) will subscribe for their respective shares
- Remaining 30% fully underwritten by Aker ASA and BP plc at 155 NOK/share
- Dividend level to increase to USD 350 million per year from Feb. 2018 and to increase further post Johan Sverdrup start-up
Closing
- Closing of the transaction is expected in the fourth quarter 2017
- Subject to regulatory approval
Farm down
- Aker BP plans to proactively pursue upsides and add new reserves through further investments in the fields
- Intention to farm down to ~67% ownership (cash/asset swap)
AKER BP ASA Increased ownership in a valuable production hub
- Hess Norge's main assets are its interest in the Valhall (64.05%) and Hod (62.50%) fields
- Aker BP is the operator of Valhall and Hod and will have 100% ownership in both fields after the transaction
- Represents significant addition to reserves, resources and production base
- 150 mmboe of reserves** (2P end 2016)
- 195 mmboe of contingent resources*** (2C end 2016)
- Production of ~24,000 boe/day (2017, 9 months)
- More than 85% liquids
- New field centre with state of the art technology
- Significant value creation potential identified
- Full ownership control allows Aker BP to pursue upsides more aggressively
Illustrative production potential*, mboepd net
*Sanctioned and non-sanctioned projects
** Based on Aker BP end of 2016 Annual Statement of Reserves
*** Based on Aker BP evaluation, excluding immature options and identified upsides – as presented at the 2017 CMD
Significant value creation potential AKER BP ASA
Valhall/Hod STOOIP* is about 3.8 billion barrels
- 1 billion barrels produced per Jan 2017
- Ambition to produce at least 500 mmboe more
- IP Platform drilling program commenced in Q1-17
- 7 wells campaign currently drilling well #3
Valhall Flank West project concept selection approved
- Planned as unmanned wellhead platform with 12 well slots, tied back to Valhall field centre
- PDO planned for late 2017, first oil expected in 2020
- Valhall Flank North water injection project being matured
- Maturing further growth opportunities in the area, including
- Valhall Flank West upsides
- Valhall Flank South
- Hod West and Saddle wells
- Hod East and Water Flood
- Lower Hod formation
Strong strategic fit AKER BP ASA
Improve
Execute
Grow
Strengthens operator position
Pursue organic upside potential
Continuous improvement of efficiency in drilling and P&A operations
Apply Aker BP's alliance model for new projects
- Adds scale to existing growth opportunities
- Full control over the future development of the Valhall area
Safety