Aker — M&A Activity 2016

Jun 10, 2016

Aker ASA: Det norske oljeselskap and BP Norge merge to create leading independent E&P company on NCS

Aker ASA: Det norske oljeselskap and BP Norge merge to create leading independent E&P company on NCS

Reference is made to Det norske oljeselskap ASA's ("Det

norske") stock exchange announcement today regarding the

agreement with BP Plc ("BP") to merge with BP Norge AS ("BP

Norway") through a share purchase transaction to create the

leading independent E&P company on the Norwegian Continental

Shelf (NCS). The company will be renamed Aker BP ASA ("Aker

BP"), with Aker ASA ("Aker") and BP as main industrial

shareholders.

Aker is the main shareholder in Det norske with a 49.99 per

cent ownership, held through its wholly-owned subsidiary

Aker Capital AS. Aker BP will be jointly owned by Aker (40

per cent), BP (30 per cent) and other Det norske

shareholders (30 per cent). 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

of these shares from BP at the same share price to achieve

the agreed-upon ownership structure.

"We take great pride in the fact that BP has chosen to

partner with Aker in transforming Det norske into a leading

independent offshore E&P company," said Aker's Chairman

Kjell Inge Røkke. "With this transaction, we provide Det

norske with operational strength, a robust capital structure

and two solid industrial owners, thereby creating a platform

for further growth on the NCS and near-term capacity to pay

out quarterly dividend."

The transaction will strengthen Det norske's balance sheet

and is credit accretive through a 35 per cent 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.

"We have been in close dialogue with Folketrygdfondet, Det

norske's second-largest shareholder, which supports the

transactions," said Aker's President and Chief Executive

Officer, and Det norske's Chairman, Øyvind Eriksen.

The effective date of the transaction is 1 January 2016 and

expected closing is in the third quarter 2016, subject to

approval by the relevant authorities.

The collaboration between BP and Aker spans several decades,

and the two companies have previously explored the

opportunity to create a large independent E&P company. Aker

established Aker Exploration in 2006, which has grown

through subsequent mergers and acquisitions, including Det

norske and Marathon Oil Norway.

"Years of close collaboration between BP and Aker have now

resulted in a new milestone for Det norske," said Eriksen.

"In combining Det norske and BP Norway we will accelerate

our strategy for Det norske to become a champion on the NCS

in terms of lowest cost of production and highest

profitability per barrel. We believe the transaction will

yield significant value for both Det norske, BP and Aker's

shareholders."

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 had a net average production of 60,000 barrels of

oil equivalent per day in 2015.

"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 a significant opportunity 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.

The full stock exchange notice on the transaction can be

downloaded from Det norske's web page www.detnor.no

Investor and analyst call:

Det norske, BP and Aker will host an investor and analyst

call at 08:00 CET (0700 BST)

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

time using the number and confirmation code below.

Confirmation code: 3804762

National free phone - United States of America: 1877 280

2296

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

National free phone - Norway: 800 56053

Local - Oslo, Norway: +472350 0486

National free phone - United Kingdom: 0800 279 5736

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

Press conference

Det norske, BP and Aker will host a press conference at

10:00 CET (0900 BST) on 10 June 2016:

Venue: Fornebuporten building B, Oksenøyveien 10, Lysaker

Language: English

Webcast: A live webcast will be available at

www.detnor.no/en

END

For further information, please contact:

Investors:

Marianne Stigset, Head of Investor Relations

Phone: +47 24 13 00 66

Mobile: +47 41 18 84 82

Media:

Atle Kigen, Head of Corporate Communications

Phone: +47 24 13 00 08

Mobile: +47 907 84 878

This information is subject to the disclosure requirements

pursuant to section 5-12 of the Norwegian Securities Trading

Act.