OKEA ASA

M&A Activity • Mar 20, 2023

OKEA acquires 28% working interest in PL037 (Statfjord Area) from Equinor

OKEA acquires 28% working interest in PL037 (Statfjord Area) from Equinor

Trondheim, 20 March 2023 - OKEA ASA ("OKEA") is pleased to announce that it has

entered into an agreement with Equinor Energy AS ("Equinor") to acquire 28%

working interest ("WI") in PL037 (Statfjord Area) with effective date 1 January

2023 for an initial fixed consideration of USD 220 million (the "Acquisition").

[image]

Statfjord C. Source: Equinor

Highlights

· Acquisition of 28% WI in PL037 from Equinor, comprising 23.93123% WI in

Statfjord Unit, 28% WI in Statfjord Nord, 14% WI in Statfjord Øst Unit and 15.4%

WI in Sygna Unit

· Effective date 1 January 2023 with expected completion in Q4 23

· Initial fixed consideration of USD 220 million including tax balances of

approximately NOK 300 million

· In addition, the agreement contains contingent payment terms applicable for

2023-25 for certain thresholds of realised oil and gas prices

· Net 2P reserves of 41 mmboe and net 2C resources of 8 mmboe

· Additional upside volume potential estimated to net 14 mmboe, identified by

OKEA based on drilling beyond 2028 and cost reduction initiatives

· Adds production in 2023 of 13,000 - 15,000 boepd and expected to grow to

16,000 - 20,000 boepd in 2024

· Equinor to retain responsibility for 100% of OKEA's share of total

decommissioning costs related to Statfjord A

· OKEA liable for its share of costs related to the decommissioning of

Statfjord B and C. However, Equinor retains responsibility for decommissioning

costs relating to any full or partial removal of Statfjord B and C gravity-based

structures, should it be required

· No new financing required for funding the transaction as majority of

purchasing price, based on current forward prices, will be covered by cash flows

generated by the assets prior to completion

OKEA CEO, Svein J. Liknes stated: "We are very pleased to announce this

transaction with Equinor which represents another significant step in delivering

value-accretive growth in line with our strategy. Through this acquisition, we

are increasing production to well above 40,000 boepd in 2024, nearly three times

higher than production at the time of launching our growth strategy in the fall

of 2021. In addition, we are diversifying our asset base further without the

need for any new financing. We look forward to initiating a fruitful cooperation

with Equinor and their FLX team and continuing to create value as a leading mid-

to late-life operator."

Transaction details

OKEA will acquire a 23.93123% WI in Statfjord Unit, 28% WI in Statfjord Nord,

14% WI in Statfjord Øst Unit and 15.4% WI in Sygna Unit from Equinor for an

initial fixed cash consideration of USD 220 million based on effective date 1

January 2023. The acquisition price includes tax balances of approximately NOK

300 million.

In addition to the fixed consideration, the agreement contains a contingent

consideration structure based on profit sharing on crude oil volumes sold at a

realised price of 75-96 USD/bbl in 2023, 64-85 USD/bbl in 2024, and 53-72

USD/bbl in 2025, as well as on dry gas volumes sold at a realised price of 170

-341 p/th in 2023, 125-248 p/th in 2024, and 37-75 p/th in 2025. The profit

sharing within these limits is 90% after tax to Equinor and 10% to OKEA. For

realised prices on crude oil above 96 USD/bbl in 2023 and 85 USD/bbl in 2024 and

realised prices on dry gas above 341 p/th in 2023 and 248 p/th in 2024 the

profit sharing is on 50/50 after tax basis. OKEA keeps 100% of realised oil

prices above 72 USD/bbl and gas prices above 75 p/th in 2025. All numbers are

stated in real 2023 and realised prices are based on annual averages. There is

no contingent payment structure for NGL.

Equinor will retain responsibility for 100% of OKEA's share of total

decommissioning costs related to Statfjord A, while OKEA will be liable for its

share of decommissioning costs related to Statfjord B and C. However, Equinor

will retain responsibility for any decommissioning costs relating to a full or

partial removal of the gravity-based structures, should it be required

OKEA will pay Equinor USD 48 million (real 2023) in 2028 as decommissioning

security which will be repaid to OKEA at 4% p.a. real interest until abandonment

is completed.

No new financing is required for funding the transaction as the majority of the

purchasing price, based on current forward prices, will be covered by cash flows

generated by the assets prior to completion.

The transaction is conditional upon Norwegian governmental approval and is

expected to be completed in Q4 23.

Strategic rationale

The transaction matches OKEA's strategy as a leading mid to late-life NCS

operator focused on growth, value creation and capital discipline. The

significant increase in production, reserves and resources, adds scale and

diversification and enhances robustness in the portfolio. In addition, the

transaction represents the initiation of a partnership with a dedicated and

competent operator in the Equinor FLX team which is committed to safe

operations, increased recovery, and reducing costs and CO\2\ emissions. OKEA

will contribute with management and operating experience.

Facts about the Statfjord Area

The Statfjord Area comprises the Statfjord Unit, Statfjord Øst Unit, Statfjord

Nord and Sygna Unit. The Statfjord Unit development covers the Statfjord A, B

and C concrete gravity-based platforms. The other fields are subsea developments

tied back to the main field platforms.

Statfjord Area is one of the largest fields on the NCS in terms of initial oil

in place which was in excess of 6 billion barrels. Statfjord A was put on

production in 1979, followed by Statfjord B in 1982 and Statfjord C in 1985. The

field is operated by Equinor and the Field Life extension (FLX) unit was

established in 2020 with an ambition to deliver 200% increase in remaining

reserves, 25% cost reduction and 50% CO\2\ reduction in the Statfjord Area by

2030. The FLX unit focuses on safe operations, improving recovery from the field

as well as reducing costs and CO\2\ emissions and has a strong track record of

deliveries in recent years.

Presentation to analysts and investors

OKEA will hold a presentation to analysts and investors at 10:00 CET today, 20

March 2023. Please see dial-in details below. The presentation material is

attached hereto.

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Video Conference ID: 129 621 652 5

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For further information, please contact:

CEO Svein Liknes, +47 917 67 704

CFO Birte Norheim, +47 952 93 321

VP IR & Communication Anca Jalba, +47 410 87 988

About OKEA

OKEA ASA is a leading mid- to late-life operator on the Norwegian continental

shelf (NCS). OKEA finds value where others divest and has an ambitious strategy

built on growth, value creation and capital discipline.

OKEA is listed on the Oslo Stock Exchange (OSE:OKEA)

More information at www.okea.no

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to disclosure requirements pursuant to

Section 5-12 of the Norwegian Securities Trading Act.

The stock exchange announcement was published by Anca Jalba, VP IR &

Communication, OKEA ASA on 20 March 2023 at 07:00 CET.