Det Norske expands Norwegian portfolio
The deal — due to close in the first quarter next year — will add stakes in 13 Norwegian exploration licences to Det Norske's portfolio. Det Norske already has an interest in nine of the 13 licences. It marks the latest step in an acquisition-led growth strategy that has transformed Det Norske from a small exploration-focused company into one of Europe's largest independents.
Det Norske acquired the Norwegian assets of US firm Marathon Oil last year, a deal that drove the firm's Norwegian production to over 58,000 b/d of oil equivalent (boe/d) in the second quarter this year, compared with less than 3,000 boe/d a year earlier.
Det Norske also has stakes in two major Norwegian projects currently under construction, which will boost its output further over the next few years. The Ivar Aasen field is due on stream in the fourth quarter of next year, while the giant Johan Sverdrup field is scheduled to start up in late 2019.
The Svenska Petroleum licences already hold a number of discoveries including Garantiana and Krafla/Askja. Det Norske expects to make a decision on whether to develop Garantiana and Krafla/Askja around 2018.
"The acquisition fits very well in our existing portfolio as investment decisions on the these new developments will occur after start-up of Ivar Aasen and the majority of the capital expenditure will thus be funded by Johan Sverdrup cash flow," chief executive Karl Hersvik said.
Det Norske will fund the acquisition through existing cash reserves and undrawn debt facilities. The company held around $188mn of cash on its balance sheet at the end of June, and had undrawn credit of around $1.6bn.