DEA takes E.ON Norway biz for $1.6 billion

E.ON is divesting 100% of its Norwegian exploration and production (E&P) business in a US$1.6 billion deal with Germany’s DEA Deutsche Erdoel AG.

Image from E.ON.

Upon the terms of the contract, DEA will get a total of 43 licenses, including partner investments in the three producing oil and gas fields Skarv (28.1%), Njord (30%) and Hyme (17.5%) that have a total production of about 45,000 boe/d. DEA will also gain shares in development projects and discoveries including Snilehorn, Snadd and Fogelberg, in addition to exploration licenses on the Norwegian Continental Shelf.

The agreement, which includes $100 million in cash, is subject to approval by the Norwegian authorities and the European Commission.

The sale for E.ON will support the company’s efforts for its overall financial framework to provide flexibility to implement its strategy and repositioning in the group.

“The outcome demonstrates that E.ON E&P is a high performing business with a strong asset base and superbly professional employees. DEA has a long history in Norway, and I am convinced that they will continue to build on this success story in the future,” Michael Sen, E.ON CFO said. “We will work closely with the new owner to ensure the course for the future of the business.”

The deal, which DEA sees as the first step to its new growth strategy, will provide DEA with a much larger portfolio, doubling the company’s daily production of oil and gas in Norway to more than 75,000 boe/d. 

DEA’s Norwegian subsidiary, DEA Norge AS, has a license portfolio of 31 licenses, including shares in production of several fields such as Snorre, Gjøa, creaking, Snøhvit, and Veslefrikk, including operatorship of the Zidane field.

"The acquisition in Norway fit our renewed corporate strategy," Thomas Rappuhn, CEO of DEA German oil AG said. "We will increase our reserve base, increase our production significantly and our portfolio add promising growth opportunities. In addition, we are accelerating our future growth through economic field development projects in Europe and North Africa as well as by further M & A activity in these regions.”

E.ON is looking at its UK E&P business, which remains under strategic review.