New E&P player created as ExxonMobil sells Norwegian business to Point Resources
- Business & Finance
Norway-based investment fund HitecVision and its portfolio company Point Resources have signed an agreement to acquire ExxonMobil’s operated upstream business in Norway from ExxonMobil Exploration and Production Norway.
HitecVision created its majority owned company Point Resources in January 2016 by merging three oil companies – Pure E&P, Spike Exploration, and Core Energy – to form a mid-sized independent oil company focused on the Norwegian Continental Shelf.
According to HitecVision’s statement on Wednesday, the acquisition includes a transfer of the majority of ExxonMobil’s offshore and onshore E&P staff in Norway; a package of operated producing assets on the Norwegian Continental Shelf; field assets such as platforms and floating production storage and offloading vessels (FPSOs); as well as the company’s office building in Sandnes, near Stavanger.
The business will be acquired by and combined with Point Resources to create a new mid-sized Norwegian E&P company.
HitecVision said that production in 2016 from the combined assets was about 60,000 barrels of oil equivalent per day (boepd), of which about 54,000 from the ExxonMobil-operated fields. With an asset portfolio that includes several fields in the development phase, the combined company has the potential to grow its production base organically to over 80,000 boepd by 2022, and will have reserves and contingent resources of about 350 million barrels of oil equivalent, the company added.
To be acquired
The acquired business has about 300 employees, including both onshore and offshore operations staff, together with other technical and support functions. Given the number of development plans and other opportunities, no redundancies are expected within the combined company as a result of the transaction.
The business to be acquired comprises ExxonMobil’s operated interests in the producing Balder (100%), Ringhorne (100%), and Ringhorne Øst (77%) fields; the partially developed Forseti field (100%); the Jotun unit, where production ceased in 2016 (90%); and adjoining exploration areas that contain a number of undrilled prospects. Also included in the transaction is the Jotun A floating production vessel and ExxonMobil’s Sandnes offices.
HitecVision and Point Resources intend the combined company to make further material investments in the acquired assets in order to extend field life and to maximize oil and gas recovery.
Jan Harald Solstad, Chief Executive of Point Resources, said: “The combination of ExxonMobil’s Norwegian operated business with Point Resources will create a new significant Norwegian E&P company, with plans to invest more than 20 billion kroner on the Norwegian Continental Shelf over the next five years.
“The combined company will build on ExxonMobil Norway’s world-class operating organisation, Point Resources’ excellent exploration track record and HitecVision’s financial strength and M&A capabilities, creating a strong platform for further growth. The two portfolios are highly complementary with strong near-term production and a portfolio of top-tier, low-cost development projects.”
Ole Ertvaag, CEO and Founding Partner of HitecVision, commented: “Over the last 15 years, HitecVision has started or acquired ten oil companies, but the acquisition of a business of this size and quality is unique.”
The transaction is subject to customary regulatory and partner consents and is expected to complete in 4Q 2017, with an effective date of January 1, 2017.