Det norske buys Marathon Norway for $2.1B

Det norske has entered into an agreement to acquire Marathon Norway for a cash consideration of USD 2.1 billion (NOK 12.6 billion).

The cash consideration is based on a gross asset value of USD 2.7 billion and is adjusted for debt, net working capital and interest on the net purchase price. The effective date of the transaction is 1 January 2014 and it is expected to close in the fourth quarter 2014, subject to customary regulatory approvals.

After the transaction, Det norske will have 202 million barrels of oil equivalent (boe) of 2P reserves. The plan for development and operation for Johan Sverdrup, scheduled for submission in February 2015, will increase reserves significantly. In addition, the combined company will have contingent resources amounting to 101 million boe, excluding Johan Sverdrup.

Further identified upside in Marathon’s portfolio is estimated at approximately 80 million boe. Combined 2013 production for the two companies amounted to approximately 84 thousand boe per day, making Det norske one of the largest listed independent E&P companies in Europe in terms of output.

“The strategy and vision of Det norske has always been to create a strong Norwegian E&P company. With this transformational transaction we have achieved our goal well ahead of schedule”, said Sverre Skogen, Chairman of the Board of Det norske. “We believe that there is still high potential on the Norwegian Continental Shelf and Det norske will remain a pure play NCS company”.