HitecVision and its majority owned portfolio company Point Resources are pleased to announce the signing of an agreement to acquire ExxonMobil’s operated upstream business in Norway from ExxonMobil Exploration and Production Norway AS.
This includes a transfer of the majority of ExxonMobil’s offshore and onshore E&P staff in Norway; a significant 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 strong, new mid-sized Norwegian E&P company.
The transaction is subject to customary regulatory and partner consents and is expected to complete in Q4 2017, with an effective date of 1 January 2017.
On completion of the transaction, the combined company will become one of the top independent oil and gas producers on the Norwegian Continental Shelf. 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 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.
Immediately following the acquisition, the combined company will have around 350 employees, a number that is expected to grow over the coming years. It is intended that both ExxonMobil’s current offices in Sandnes and Point Resources’ current Oslo office will be kept, and that no employees will be relocated 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 Ost (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 facility and ExxonMobil’s Sandnes offices.
A platform for further growth
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 maximise oil and gas recovery. Point Resources has already identified a significant number of infill drilling targets within the Balder, Ringhorne and Ringhorne Ost fields and plans to drill more than ten wells over the next five years, in order to boost production and increase oil recovery. There are also plans for further development of the Forseti field. In addition, a number of potentially material exploration prospects have been identified in the licences around the fields. These will be matured for drilling and may provide additional resources that can be tied back through the existing infrastructure.
Following the acquisition, the combined company will have a material and diversified portfolio of oil producing assets, development projects, and attractive exploration licenses. Planned development projects such as Pil & Bue, Bauge, Garantiana and Brasse provide an excellent platform for future organic growth and further exploration. The company’s portfolio and financial strength will also position it to take full advantage of further consolidation and acquisition opportunities on the NCS in the coming years.
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. We look forward to working with ExxonMobil, our new partners and Norwegian authorities to complete the transaction.”
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. We have the deepest respect for what ExxonMobil has achieved during their years as operator of Norwegian oil and gas fields, and we are pleased to be a part of the creation of a new key contributor to the changing face of the industry in Norway.”