The Norwegian company has offered $36.50 a share in an all-cash tender offer. The total equity value of the deal is about $4.4 billion, with an enterprise value of about $4.7 billion.
Brigham has over 100 employees and the deal will give Statoil more than 375,000 net acres in the Williston Basin, which has the potential for oil
production from the Bakken and Three Forks formations— the largest oil accumulations in the U.S. Brigham also holds interests in 40,000 net acres in
“Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil. We are positioning
ourselves as a leading player in the fast growing U.S. onshore oil and gas industry, in line with the strategic direction we have set out,” said Statoil
Chief Executive Helge Lund.
Commercial-tight-oil extraction is a relatively new activity and has increased significantly in the last couple of years, Statoil said. Tight-oil
reservoirs are developed using methods similar to shale gas—another unconventional source in which Statoil is already present in the U.S. at the
Marcellus and Eagle Ford fields.
“We believe that unconventional resources will play an increasingly important role in global energy supply. And we want to be an early entrant into these new areas,” Mr. Lund said.
“These are resources where you can add value through technology, and through the deep understanding of reservoirs and the subsurface which we have.”
The Brigham deal also gives Statoil about 690 kilometers of oil, natural gas and water transportation systems in the Williston Basin.
Brigham’s board of directors unanimously recommended shareholders accept the offer. Tudor, Pickering, Holt & Co. Securities, Inc. and Goldman Sachs Group Inc. are acting as financial advisors to Statoil and Vinson & Elkins LLP is acting as legal adviser.
Statoil’s shares were 0.7% lower in midday trade at 136.90 kroner.
Source: The Wall Street Journal
Published: February 24, 2020