Equinor — M&A Activity 2019

Jul 7, 2019

Equinor capitalizes shares in Lundin Petroleum for increased direct ownership in Johan Sverdrup and a cash consideration

Equinor capitalizes shares in Lundin Petroleum for increased direct ownership in Johan Sverdrup and a cash consideration

Equinor ASA (OSE: EQNR, NYSE EQNR) has agreed with Lundin Petroleum AB to divest

a 16 percent shareholding in Lundin Petroleum for a direct interest of 2.6

percent in the Johan Sverdrup field and a cash consideration of around USD 650

million.

"Since 2016 we have more than doubled the value of our investment in Lundin.

This transaction gives us the opportunity to capitalize on this value creation,

and at the same time increase our direct ownership in the Johan Sverdrup field,"

says Eldar Sætre, President and CEO of Equinor.

Under the terms of the agreements, Equinor will divest around 54.5 million

shares in Lundin at a price of SEK 266.4 per share. Total consideration for the

divestment of shares in Lundin amounts to around USD 1.56 billion. Equinor will

acquire a 2.6% direct ownership share in the Equinor operated Johan Sverdrup

field for a cash consideration of USD 910 million.

Through this transaction, Equinor is realizing significant value creation from

its investments in Lundin Petroleum. Equinor announced its investments in Lundin

in 2016 at an average weighted cost price of SEK 121 per share, adjusted for the

divestment of International Petroleum Corporation. Equinor has more than doubled

the value of its invested capital, including its remaining shareholding in

Lundin Petroleum.

"Johan Sverdrup is truly a world class field. We are on track to start

production in November this year, and an increased direct ownership share gives

us the opportunity to create even more value for our shareholders," says Sætre.

Following completion of the transactions, Equinor will have a 42.6 percent

ownership share in the Johan Sverdrup field and own a 4.9 percent shareholding

in Lundin Petroleum.

The agreement includes a contingent payment of up to USD 52 million payable to

Lundin in 2025 if Johan Sverdrup proves to be at the upper end or above the

indicated resource range of 2.2 - 3.2 bn boe. In agreement with Lundin, the

transaction is being executed through a total return swap agreement, where the

Lundin shares will be acquired by Sparebank1 Markets and subsequently redeemed.

The transaction is subject to certain conditions, including customary government

approval and approval in Lundin Petroleum AB's Extraordinary General Meeting set

for 31 July 2019. The Lundin Petroleum Board of Directors have expressed their

unanimous support for the transaction, and the Lundin Petroleum family entities

have confirmed that they will vote in favour of the transaction at the

Extraordinary General Meeting. Closing of the sale of the shares in Lundin

Petroleum will take place after approval by the Lundin Petroleum Extraordinary

General Meeting. Closing of the acquisition of the interest in Johan Sverdrup

transaction is expected by Q4 2019.

Further information:

Investor relations:

Peter Hutton, Senior Vice President Investor Relations:

+44 7881 918 792

Press:

Bård Glad Pedersen, Vice President Media Relations:

+47 918 01 791

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act