Aker ASA: Det norske oljeselskap announces acquisition of Marathon Oil Norway

Reference is made to Det norske oljeselskap ASA’s (“Det norske”) stock exchange announcement today regarding the acquisition of Marathon Oil Norge AS (“Marathon Norway”). Det norske is Aker ASA’s (“Aker”) second-largest investment and is owned 49.99 per cent by Aker’s wholly-owned subsidiary, Aker Capital AS.

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.

Det norske has secured a fully-committed and underwritten acquisition loan facility for the full cash consideration. This facility has been provided by BNP PARIBAS, DNB, Nordea and SEB. The company has mandated and is in advanced discussions with the same four banks to finalise a seven-year Reserve Based Lending facility of USD 2.75 billion. This long-term facility will replace the acquisition loan and refinance Det norske’s current facilities. As an integral component of the long-term financing plan, the company will strengthen its equity base by issuing the NOK equivalent of USD 500 million in new equity through a rights issue. Aker has pre-committed to subscribe for its pro rata share of the issue. The remaining 50.01 per cent is fully underwritten by a consortium of banks. With this equity issue, the company has secured the financing of its current work program until first production from the Johan Sverdrup field.

"Det norske’s acquisition of Marathon Norway is a milestone for the company, both from an industrial and financial perspective,” said Aker President and CEO Øyvind Eriksen. "It transforms Det norske into a major independent European oil and gas producer, and enables the company to play an even more important role in the development of the Norwegian Continental Shelf. The funding requirements for the company’s current work program have been resolved, which provides visibility for Aker’s future capital requirements. With today’s transaction, we believe significant value has been created for both Det norske and Aker’s shareholders.”

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 full press release on the acquisition can be downloaded from Det norske’s web page www.detnor.no

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