Governmental approval granted for Noreco’s acquisition of Shell’s Danish upstream assets

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Oslo, 29 April 2019: Norwegian Energy Company ASA ("Noreco" or the "Company") hereby announces that Danish Energy Agency (“DEA”) has granted its approval for Noreco’s acquisition of Shell’s Danish upstream assets.

“Through this transformational acquisition, Noreco will become the second largest oil and gas producer in Denmark and establish itself as a considerable exploration and production company in the North Sea,” says Riulf Rustad, Chairman of the Board of Noreco.

Included in the acquisition are proven and probable (2P) reserves of 209 million barrels of oil equivalents (mmboe) based on an independent CPR assessment as per year-end 2017, of which 65% are liquids. The seller’s share of production from DUC in 2017 was 67 thousand barrels of oil equivalents per day (mboepd).

Further details of the transaction

As previously informed, Altinex AS, a wholly owned subsidiary of Noreco, acquires 100% of the shares in Shell Olie- og Gasudvinding Danmark B.V. ("SOGU") (the “Acquisition”) and thereby becomes the indirect owner through SOGU of inter alia:

  • a 36.8% interest in Danish Underground Consortium (“DUC”), which includes a 36.8% interest in the DUC facilities, wells and interconnecting pipelines;
  • a 100% interest in Shell Olie- og Gasudvinding Denmark Pipelines ApS (“SOGUP”), which will own a 41.4% interest in the Tyra West – F3 gas pipeline;
  • a 36.8% direct interest in the 8/06 Area B License including its corresponding entitlement to hydrocarbons won and saved under the 8/06 Area B License; and
  • a 18.4% interest in the Lulita Field unitization and operations, including its corresponding entitlement to hydrocarbons won and saved under the Lulita Field. In addition Noreco has held a 10% interest in the Lulita Field for many years, which means that the Company’s interest in the field, post transaction, will be 28.4%.

The DEA’s approval is subject to inter alia the following conditions:

  • Guarantees from Noreco on behalf of SOGU and SOGUP towards the Danish state for obligations in respect of licence 8/06, area B and the Tyra West – F3 gas pipeline to be acquired;
  • Secondary liability declarations from Shell towards the Danish state for SOGU´s 36.8% ownership in DUC and SOGUP´s 41.4% ownership in the Tyra West – F3 gas pipeline;
  • Required services level agreement internal within the Noreco group regarding support functions to subsidiary companies approved by the DEA;
  • Certain subsequent conditions related to the Noreco organization.

Following the approval, Noreco will work towards closing the Acquisition by the end of May 2019.

In connection with closing of the Acquisition, it is expected that inter alia the following shall take place (as have been previously informed):

  • The release of funds to Altinex AS from the seven-year Reserve Based Lending Facility;
  • Noreco’s repayment of the outstanding NOR10 bond loan;
  • The completion of the directed share capital increase of USD 352 million in Noreco (the “Private Placement”), as resolved on the extraordinary general meeting held on 8 November 2018 (the “EGM”); 
  • The completion of the convertible bond loan issue in Noreco of USD 160 million, as resolved on the EGM (the “Convertible Bond”);
  • Preparations for the launch of the USD 40 million subsequent offering towards eligible existing shareholders of Noreco as of 16 October 2018, as resolved on the EGM (the “Subsequent Offering”);
  • Approval of the prospectus in relation to the Private Placement and the listing of the new shares on the Oslo Stock Exchange, listing of the bonds in the Convertible Bond on the Oslo Stock Exchange and the Subsequent Offering (the “Prospectus”).

It is currently expected that the Prospectus will be approved by the Financial Supervisory Authority of Norway in early June 2019, with commencement of the subscription period for the Subsequent Offering shortly thereafter.

Contacts:

 Riulf Rustad, Chairman of the Board, +47 900 87 703 or ir@noreco.com

***

About Norwegian Energy Company ASA

Noreco is a publicly owned company with focus on the oil, gas and offshore industry. The company's shares are listed on the Oslo Stock Exchange (ticker NOR). For further information, please visit: www.noreco.com.


IMPORTANT INFORMATION

The contents of this announcement have been prepared by, and are the sole responsibility of, the Company. The Company's financial advisors are acting exclusively for the Company and no one else, and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the Securities Transactions, the contents of this announcement or any of the matters referred to herein. The Securities Transactions and the distribution of this announcement and other information in connection with the Securities Transactions may be restricted by law in certain jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about, and to observe, any such restrictions. This announcement may not be used for, or in connection with, and does not constitute, any offer of securities for sale in the United States or in any other jurisdiction.

The Securities Transactions have not been made in any jurisdiction or in any circumstances in which such offer or solicitation would be unlawful. This announcement is not for distribution, directly or indirectly in or into any jurisdiction in which it is unlawful to make any such offer or solicitation to such person or where prior registration or approval is required for that purpose. No steps have been taken or will be taken relating to the Securities Transactions in any jurisdiction in which such steps would be required. Neither the publication and/or delivery of this announcement shall under any circumstances imply that there has been no change in the affairs of the Company or that the information contained herein is correct as of any date subsequent to the earlier of the date hereof and any earlier specified date with respect to such information.

This announcement is not for publication or distribution, directly or indirectly, in the United States (including its territories and possessions, any state of the United States and the District of Columbia). This announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The shares of the Company nor the shares to be issued in the Securities Transactions have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account of, U.S. persons (as such term is defined in Regulation S under the US Securities Act), except pursuant to an effective registration statement under, or an exemption from the registration requirements of, the US Securities Act. All offers and sales outside the United States will be made in reliance on Regulation S under the US Securities Act. There will be no public offer of securities in the United States.

This announcement does not constitute an offering circular or prospectus in connection with an offering of securities of the Company. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the investor material made available by the Company only to qualified persons in certain jurisdictions where an offer may be made (if an offer is made). This announcement does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for, any securities and cannot be relied on for any investment contract or decision.

This document contains forward-looking statements. All statements other than statements of historical fact included in this information are forward-looking statements. Forward-looking statements are current expectations and projections relating to the Company’s financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target,"  "believe," "expect,"  "aim," "intend,"  "may," "anticipate," "estimate,"  "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such  forward-looking statements involve known  and unknown risks, uncertainties and  other  important  factors  beyond  the Company's  control that could cause the Company's   actual  results,  performance  or  achievements  to  be  materially different  from the expected  results, performance or  achievements expressed or implied  by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future.

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.


About Us

Noreco is a publicly owned company with focus on the oil, gas and offshore industry. The company's shares are listed on the Oslo Stock Exchange (ticker NOR). For further information, please visit: www.noreco.com.

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