North Energy in Explora takeover
North Energy, a Norwegian oil company, has acquired Explora Petroleum, an exploration and production company also from Norway, for a cash payment of $2.5 million.
According to North Energy, the transaction is being implemented through the purchase of all the shares in Explora from the company’s shareholders, who comprise certain employees and individual shareholders, and a group of institutional investors.
North Energy is financing the acquisition through existing credit facilities and cash in hand. Through the acquisition of Explora, North Energy is taking over the company’s net cash position, exploration tax refund, uncovered tax-related loss and future commitments related to organisation and the licence portfolio.
Explora had 18 employees and 16 licences on the Norwegian continental shelf (NCS) at the date of transaction, including small interests in the Skarfjell and Grosbeak discoveries, both in PL 378 in the north-eastern North Sea, located about 20 kilometres south-west of the Gjøa field.
According to North Energy, Skarfjell is currently estimated to contain 139 million barrels of recoverable oil equivalents (NPD, RNB 2015) while Grosbeak is currently estimated to contain 35 million barrels of recoverable oil equivalents (NPD, RNB 2015). Net to Explora the resources in license PL 378 are estimated to be approximately 4 mmboe.
Explora is headed by John R Pickard (Chief Executive Officer), Frode Vassbø (Commercial Manager), Birte N. Borrevik (HSE and Operations Manager), and Knut Hansch (Chief Geophysicist). The Board comprises Simon Eyers (chair), Peder Bratt, Scott Kerr, Jan Vollset, Dr Christopher A Wright, Frode Vassbo and John R Pickard.
In connection with the acquisition of Explora, North Energy says it will concentrate its petroleum operations in a single company.
“This is to be done by transferring today’s petroleum operations from North Energy to Explora, and thereby bringing employees together in a new organisation for the combined company. Acquiring Explora will strengthen North Energy’s financial position and increase its net cash position and tax balances,” North Energy said.
“We want to contribute actively to what we believe to be a necessary consolidation on the NCS,” says Knut Sæberg, North Energy’s acting CEO.
“The sharp fall in the price of oil has necessitated a much greater focus on cost optimisation and larger, more robust entities. We are therefore well positioned to play an active role in this consolidation.”
The Explora transaction is conditional on the approval of the Norwegian government, and is expected to be completed during the first quarter of 2016, North Energy concluded.