Det norske and BP Norge to Merge as Aker BP
Det norske has entered into an agreement to merge with BP Norge through a share purchase transaction, to create a new offshore E&P company.
The announcement comes just a few days after Det norske revealed subsea contract awards in excess of NOK 2.3 billion to Aker Solutions and Subsea 7 for its Alvheim field.
The company will be named Aker BP and will be headquartered at Fornebuporten, Norway, with Aker and BP as main industrial shareholders.
“We are proud to announce this merger to create Aker BP, the leading independent offshore E&P company. Aker BP will leverage on Det norske’s efficient operations, BP’s International Oil Company capabilities and Aker’s 175 years of industrial experience. Together, we are establishing a strong platform for creating value for our shareholders through our unique industrial capabilities, a world-class asset base and financial robustness. We look forward to taking advantage of the attractive growth potential on the Norwegian Continental Shelf through this industrial partnership with BP and to deliver on Aker BP’s dividend story,” says Øyvind Eriksen, chairman of the board of directors in Det norske.
Aker BP will be jointly owned by Aker ASA (40%), BP (30%) and other Det norske shareholders (30%). 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 shares from BP at the same share price to achieve the agreed-upon ownership structure.
“We have been in close dialogue with Folketrygdfondet, Det norske’s second-largest shareholder, which supports the transaction. From our start as an exploration company, we have developed the company into a fully-fledged E&P. With BP, we are taking another leap forward with the creation of Aker BP,” says Eriksen.
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.
“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 significant opportunities 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.
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 and BP had at the end of 2015 a combined workforce of approximately 1,400 employees.
Øyvind Eriksen will remain chairman of the board of directors and Karl Johnny Hersvik chief executive officer of the combined company.