Det Norske Oljesekskap ASA, controlled by billionaire Kjell Inge Røkke, will buy Marathon Oil Corporation’s Norwegian business for $2.7 billion in a transformational deal that will boost output 14-fold and settle questions on funding.
Det Norske, 50 percent owned by Røkke’s Aker ASA, would add production of about 60,000 barrels of oil equivalent a day in 2014, more than 13 times last year’s output, Chief Executive Officer Karl Johnny Hersvik said today in a presentation. It will pay $2.1 billion in cash excluding debt and other items.
Cash flow from Marathon’s assets, new debt and a share sale will ensure Det Norske is fully funded for development of the Johan Sverdrup field, potentially Norway’s largest find since the 1970s, until it starts output at the end of 2019, he said.
“This was the most attractive and less costly opportunity for Det Norske and our shareholders,” Hersvik said in an Oslo interview. “It changes the whole setup. In one strike, we become a fully integrated E&P company through the whole value chain, from exploration and development to production.”
Published: February 6, 2014