23 / 10 / 2018 - 08:44

Lundgrens bistår Noreco ved købet af Shells andel af DUC

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Lundgrens bistår Noreco ved købet af Shells andel af DUC

Lundgrens har været lead-counsel for Noreco i en af årets største transaktioner i Danmark, hvor Noreco har købt Shells 36,8 % andel af Dansk Undergrunds Consortium (DUC). DUC er Danmarks største olielicens i Nordsøen, og transaktionen har en værdi på over 12 mia. danske kroner. Handlen er betinget af blandt andet myndighedsgodkendelse.

Kristian Andersson, Jakob Schilder-Knudsen og Morten Rosenmejer har været primært ansvarlige for transaktionen i Lundgrens.

Læs uddrag af børsmeddelsen nedenfor:

Extended notice

Norwegian Energy Company ASA's (“Noreco” or the “Company”) wholly owned subsidiary, Altinex AS (“Altinex”) has entered into an agreement to acquire Royal Dutch Shell Plc’s (“Shell”) upstream assets in Denmark (the “Acquisition”). Through the transaction, Noreco becomes the second largest oil and gas producer in Denmark and a considerable E&P company.

Establishing Noreco as a considerable independent E&P company

This acquisition will establish Noreco as an E&P company on the Danish Continental Shelf (“DCS”), and position it as the second largest oil and gas producer in the country. Noreco will post completion have a 36.8% non-operated interest in the Danish Underground Consortium (“DUC”) with assets that comprise 15 fields in four producing hubs; Halfdan, Tyra, Gorm and Dan. DUC is a joint venture between Total (31.2%), Shell (36.8%), Chevron (12.0%) and Nordsøfonden (20.0%) cooperating to recover oil from the Sole Concession holder’s area of the Danish North Sea. Total recently announced the acquisition of Chevron’s (12.0%) interest, which remains subject to approval of partners and relevant authorities. The Sole Concession covers 1,635.7 km² of the DCS. DUC is operated by Total which has extensive offshore experience in the region and worldwide.

The transaction

The transaction will be structured as a sale to Altinex of all shares in Shell Olie- Og Gasudvinding Danmark B.V. (“SOGU”), which in turn owns a 36.8% interest in DUC and a 100% interest in Shell Olie- Og Gasudvinding Denmark Pipelines ApS (“SOGUP”), which will own a proportionate interest in the F3 gas pipeline.

Included in the transaction are proven and probable (2P) reserves of 209 million barrels of oil equivalent (mmboe) based on an independent CPR assessment as per year-end 2017, of which 65% are liquids. Further, Noreco estimates significant reserves and production growth coming from existing resources (discoveries, EOR initiatives & new projects). Shell’s share of production from DUC in 2017 was 67 thousand barrels of oil equivalent per day (mboepd). Noreco expects to maintain strong production in the years to come. The DUC portfolio has attractive economics, with 2017 opex of USD 13 per boe. As the Tyra hub is being redeveloped, the portfolio will be revitalised and offer improved economics accompanied by prolonged field life. Liquids production volumes are protected through a guarantee lasting from signing of the Acquisition through 2020.

Local SOGU staff mostly dedicated to the DUC will pass to Noreco along with the business with their existing contracts of employment intact and full continuity of service. In total ca. 8 employees will follow from Shell, which will bring additional competences to the Noreco organisation. Following the transaction, Noreco will have 15 employees, and does not plan to make any organisational reductions. The SOGU organisation is based in Copenhagen, and Mr. Lee James Hodder serves as managing director. The Board of Directors of SOGU currently consists of Mr. Lee James Hodder and Mr. Michael Lund Jensen.

Completion of the transaction is subject to: receipt of all mandatory consents, approvals and clearances from governmental authorities, including the Danish Energy Agency; that no party relevant to the joint operating agreements invokes option rights to purchase Shell’s SOGU interest; and other conditions customary for a transaction of this nature.

Subject to fulfilment of applicable conditions, completion is targeted for H1 2019.

Noreco will, to the extent required by section 3.5 of the Oslo Stock Exchange Continuing Obligations, prepare an information memorandum with further information on the Acquisition and Noreco’s operations following completion of the Acquisition.

Transaction consideration and financing

The consideration of the transaction is USD 1.9 billion with effective date as of 1 January 2017, with pro contra adjustment currently estimated by Noreco to USD 0.7 billion.

[…]

About SOGU’s assets

Halfdan

Halfdan is the largest producing field in Denmark and the most important DUC asset in terms of value and resources. The field came into production in 1999 and consists of two main groups of platforms, Halfdan A and Halfdan B in addition to an unmanned wellhead platform, Halfdan CA (North East).

Produced oil is transported in pipeline to shore via Gorm while the gas is transported to the Tyra hub. Gas can also be imported (for injection) and exported to Dan. Injection water is supplied from Dan.

SOGU’s share of remaining reserves is estimated to 61 MMstb oil and 163 Bscf gas as of 31.12.2017 based on independent reserves report. Halfdan produced 24 mboepd in 2017 (net to SOGU).

Dan hub

Dan was the first field in production in Denmark in 1972. Close to 28% of total Danish oil production has been extracted from Dan. The field remains a significant asset within the DUC portfolio.

The Dan field has been developed in several phases and now consists of a total of 12 platforms. The oil production from Dan is transported to Gorm while the gas is transported to Tyra East.

The Dan hub has two satellite fields, Kraka and Regnar, of which Kraka is currently producing.

SOGU’s share of remaining reserves related to the Dan hub is estimated to 28 MMstb oil as of 31.12.2017 based on independent reserves report. The Dan hub produced 10 mboepd in 2017 (net to SOGU).

Tyra hub

The Tyra field commenced production in 1984. The field installations comprise three platform complexes, Tyra West, Tyra East and Tyra South East. Tyra is the centre for Denmark’s national energy infrastructure, processing ~90% of the nation’s gas production. The oil and condensate production from the Tyra field and its satellite fields are transported to shore via Gorm.

Total, as operator is undertaking the full redevelopment of Tyra as Denmark’s major gas hub, and in the process extending the life of the Danish North Sea. The redevelopment of Tyra ensures continued production from Denmark’s largest gas field and will protect important Danish North Sea infrastructure. The Tyra redevelopment was sanctioned in 2017 and is expected to bring the hub on-stream in 2022. As part of the agreement, Noreco will assume all of Shell’s existing commitments and obligations, including the Tyra redevelopment.

The Tyra hub also includes the satellite fields Valdemar, Roar, Svend (Svend is shut in), Harald and Lulita (Noreco holds a 10% working interest in producing field Lulita prior to the transaction).

SOGU’s share of remaining reserves related to the Tyra hub is estimated to 35 MMstb oil and 263 Bscf gas as of 31.12.2017 based on independent reserves report. The Tyra hub produced 27 mboepd in 2017 (net to SOGU).

Gorm hub

Gorm production started in 1981, making it the second Danish field in production. Gorm provides processing and utilities support tosatellite fields Skjold, Rolf and Dagmar (Dagmar is shut in)in addition to being the export centre for most of the liquids produced on the Danish Continental Shelf. The oil from Gorm and the rest of the DUC portfolio is transported onhore to the Frederica refinery via pipeline. Gas from Gorm is sent to the Tyra hubfor export.

SOGU’s share of remaining reserves related to the Gorm hub is estimated to 11 MMstb oil as of 31.12.2017 based on independent reserves report. The Gorm hub produced 6 mboepd in 2017 (net to SOGU).

About Noreco

Noreco is a publicly owned company with focus on the oil, gas and offshore industry. The company's shares are listed on the Oslo Stock Exchange (ticker NOR). For further information, please visit: www.noreco.com. This information is subject to disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act and section 3.4 of the Oslo Stock Exchange’s Continuing Obligations.

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