Net Trading Group NTG AB (publ) enters into an agreement to acquire Rock Energy Group Limited
The board of Net Trading Group NTG AB (‘NTG’) and the board of Rock Energy Group Limited (‘Rock Energy’ and / or ‘REG’) has signed an agreement to acquire REG. The acquisition is part of Net Trading Group's vision to create a profitable and innovative ESG company with focus on green and sustainable energy.
- My first comment when Lightcircle was acquired by NTG was that the goal is to build a new Nordic industrial company. The acquisition of Rock Energy is a huge step in this direction. Rock Energy possesses world-leading and pioneering technology in geothermal energy, which is the only real environmentally friendly substitute for oil, gas, coal and nuclear power. Both businesses in the new company are uniquely positioned, both as a smart producer of our Lightcircle products, a business that remains in accordance with the agreement, but also as a distributor of cost-effective, environmentally friendly energy, says Morten Revill, Chairman of the Board of NTG.
Rock Energy is active in the renewable- and sustainable energy industry by producing heating, cooling and power from deep energy wells. The company's solutions offer independent and local energy production, which is cost-effective in comparison to energy from larger distribution networks.
- We are now acquiring unique and world-leading patented technology. The expertise in Rock Energy comes from lifelong industrial development in the oil and offshore industry and we now secure impressive global patents related to geothermal energy. The team at Rock Energy is impressive and I am happy that together we will develop NTG into a large and appreciated ESG company. With all the potential synergies I see an almost unlimited potential, says Revill.
This form of renewable energy differs from wind and solar because it provides baseload energy, which operates 24/7. It also differs radically from other and less developed geothermal companies who traditionally have been seeking energy from specific tectonic hotspots, while Rock Energy are extracting energy directly from the ground - anywhere.
- The agreement we have entered into gives us a unique base for building a leading company in the use of geothermal energy worldwide. Global commercialization and industrialisation of geothermal energy are in their infancy. With the competitive technology and experience we have I am sure that we have all the prerequisites for success here. It is the most exciting company I have ever been involved in, says Reidar Michaelsen, Chairman of the Board of Rock Energy.
Unique technology
Rock Energy's energy solutions do not cause emissions to air, water or land and can be kept in operation around the clock with an expected life of over 50 years. Rock Energy's patented technology is developed for significantly deeper boreholes than today's conventional geothermal heating systems, which results in significantly higher energy production.
There is currently a massive move in the energy market towards independent power production - off the grid. In parallel, there is a big movement towards renewable energy production. All energy users looking to utilise renewable energy are searching for alternatives being independent from weather conditions and commodity prices. Even more so, they dream of having it available around the clock - 24/7. Rock Energy’s energy wells tick all of the above boxes – exclusively. Rock Energy is the first mover in the deeper site- independent space with proprietary technologies, including several plant design protections, innovative patented drilling and completion designs, technology for monitoring geothermal reservoirs and tools for looking ahead of the drill bit, logging, mapping and monitoring tools for geothermal wells.
If that wasn’t enough, Rock Energy also utilise cloud technologies, artificial intelligence and machine learning to optimise the output.
Rock Energy's first energy plant was commissioned in 2018 at Norway's largest airport, Oslo Airport Gardermoen. The plant consists of two deep energy wells at a depth of 1,500 meters that are used for heat production during the winter in order to relieve the electricity grid during peak load. The parties have also signed a letter of intent to build more energy wells at Gardermoen over the next two years. Rock Energy has also built an energy plant together with Skanska and the Norwegian State Building and Property Board. The plant consists of four deep rock heat wells at a depth of 750 meters that are used for heat production during the winter in order to relieve the electricity grid during peak load.
Approximately SEK 120 million has historically been invested in the development of the Rock Energy's energy solutions, including the acquisition of 17 patents relating to the geothermal area and the conclusion of several exclusive rights worldwide for a large number of technology licenses. The large portfolio of intellectual property rights and proprietary software enable Rock Energy to have the best understanding of sites, compositions and attributes for geothermal energy in the industry.
Synergies
The merged company will develop a number of synergies between its various verticals.
- This unites us to become the only company in the world with a number of unique technologies related to energy and energy saving - and enables us to follow the power in the entire circuit - from our own power plant to our smart outlets. It will provide unmatched opportunities, says Morten Revill.
The typical customers for Rock Energy are municipalities, large builders and property owners. By bundling the product mix into the company, a large developer can now develop areas where there is no electricity network. In addition, it becomes natural that the customer also chooses the company's Lightcircle products to meet their needs.
- Perhaps the most exciting development we will initiate immediately will be the use of artificial intelligence to track power consumption, build our own database and thereby develop a distribution solution that none of the world's energy producers is close to being able to do themselves, says Revill.
Suistanable financing
Rock Energy's board has signed this agreement as the company sees a solid interest from industry-leading companies for future projects. Rock Energy wish to attract a broader shareholder base, primarily from institutional investors focused on renewable energy, which makes it possible for the Company to deliver a large number of energy facilities in collaboration.
Green bonds increase the attractiveness of institutional investors. Over $ 1 trillion in green bonds have so far been issued under the Climate Bonds Initiative. The acquisition by the public company NTG will make Rock Energy even more attractive and accessible to institutional investors. Climate bonds will form an important part of the financing of Rock Energy's future expansion plan for its build, own and operate strategy (BOO).
The Rock Energy team
Rock Energy have competencies in the full geothermal value chain with a widely experienced team within energy, energy systems, drilling, geology, finance and project management.
Rock Energy consists of a widely experienced oil & gas drilling team transferring the best oil field technologies to the geothermal industry and is controlling the entire technology life cycle from exploration to the final end-user, which provides added value.
Rock Energy’s Chairman is Reidar Michaelsen, founder and previous chairman and CEO of Petroleum Geo-Services (‘PGS’) where he raised over USD 3.5 bn in equity, bonds and project financing, in addition to more than 10 years in Norsk Hydro and Spinnaker Exploration.
Rock Energy’s CEO is Jan Edin Evensen, with more than 30 years of technical and senior management experience from the upstream oil and gas industry and experience with major exploration activities in the North Sea, together with significant oil and gas development projects internationally, both offshore and onshore, for multinationals like Norsk Hydro, Shell and Amerada Hess.
Rock Energy’s board member and Acting CFO is Bjarne Eggesbø, with more than 20 years of capital markets experience, as former Head of Real Estate for a publicly listed asset manager with over USD10bn in assets under management and previous CEO & CIO of a private global asset manager, responsible for USD 8bn in assets under management. His extensive career includes leading positions at UBS, Credit Suisse and the rating agency Moody’s Investors Service.
Board member Stig Myrseth has a distinguished and long-standing career as a financial analyst, fund manager and founder of financial institutions among others a brokerage firm, a fund management company and a bank. Myrseth has reputation as one of Norway’s leading financial experts.
The transaction
The agreement is structured so that the shareholders in Rock Energy will receive 800 million new shares in NTG through a share issue. Following the transaction Rock Energy’s shareholders will hold 89.08% and NTG's current shareholders 10.92%. The agreement is subject to approval by NTG's Extraordinary General Meeting, which is planned to be held during the second half of April 2021. NTG's two largest shareholders have given their consent to the acquisition of Rock Energy. NTG's Board of Directors has unanimously provided their support for the acquisition.
New board
The agreement means that the shareholders in Rock Energy can appoint 4 out of 5 board members in NTG. Proposed candidates will be announced in the notice convening the Extraordinary General Meeting. A new company name will also be proposed in the notice convening the Annual General Meeting.
For further information, please contact:
Morten Revill, Chairman of the Board of Net Trading Group NTG AB (publ) Phone: +47 41637272
Email: morten@lightcircle.io
Jan Edin Evensen, CEO of Rock Energy Group Limited Phone: +47 97681150
Email: jan.evensen@rock.energy
This information is such information that Net Trading Group NTG AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted, through the above contact person, for publication on March 15, 2021 at 08:30.
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