OMV AG (OMV), the biggest central European energy company, paid $2.65 billion to Statoil ASA (STL) in its largest deal on record for stakes in four North Sea oil and gas fields as it seeks stable output after disruptions in Libya and Yemen.
The deal includes 24 percent of Statoil’s Gudrun and 19 percent of its Gullfaks field, and options on 11 exploration licenses, the companies said today in separate statements. Statoil seeks to free up cash to invest in new developments.
“This deal is positive,” said Raiffeisenbank analyst Oleg Galbur, who recommends investors hold OMV shares. “It ensures a decent return on OMV’s accumulated cash, while clearly following the company’s strategy of focusing on upstream and more stable markets,” he said of its plans for exploration and production.
The deal will increase OMV’s reserves after recent setbacks for the Vienna-based company, with output in Libya and Yemen beset by interruptions from social unrest. Its plan to build a natural-gas pipeline stretching to the Caspian Sea was also shelved in June after Azeri authorities chose a competing offer.
OMV fell 2.2 percent to 34.30 euros by 11:03 a.m. in the Austrian capital. Statoil climbed 0.7 percent to 129.5 krone.
“The Norwegian area is a politically stable area,” OMV Chief Executive Officer Gerhard Roiss said in an interview with Bloomberg television. “The transaction will provide a huge boost to OMV’s strategy and will be a key factor in achieving our 2016 targets.”
The deal, set to be completed at the end of the year, will increase OMV’s proven and probable reserves by about 320 million barrels of oil equivalent, the company said.
OMV produced 303,000 barrels of oil a day in 2012 and is targeting 350,000 barrels by 2016, the company has said.
Statoil, Norway’s biggest energy company, will use the deal to redeploy about $7 billion of capital expenditures, it said. The company is expanding abroad and moving into unconventional resources such as shale oil and gas to meet targets.
“This is a transaction that captures the full value of the assets we are divesting and reducing our ownership in,” CEO Helge Lund said in a phone interview. “Particularly on Gullfaks and Gudrun in Norway, the deal metrics demonstrate the value of the assets we have on the Norwegian Continental Shelf.”
Statoil has been producing oil from Gullfaks since 1986, while Gudrun is expected to begin production in 2014, according to the company’s website.
OMV, which had free cash flow of about 1.6 billion euros ($2.1 billion) in the first half, said the deal will be largely funded by the sale of downstream assets such as oil processing. The company expects to sell its 45 percent stake in Bayernoil Raffinerie GmbH by next year.
Today’s acquisition is the biggest in OMV’s history, surpassing the $2.01 billion it paid in April 2004 to buy Romania’s Petrom SA, according to data compiled by Bloomberg.
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