Det norske acquires Marathon Oil Norge AS

This article originates from the news archive of Det norske.

2. June 2014


Det norske oljeselskap ASA (“Det norske”) has entered into an agreement to acquire Marathon Oil Norge AS (“Marathon Norway”) for a cash consideration of USD 2.1 billion (NOK 12.6 billion).

The cash consideration is based on a gross asset value of USD 2.7 billion and is adjusted for debt, net working capital and interest on the net purchase price. The effective date of the transaction is 1 January 2014 and it is expected to close in the fourth quarter 2014, subject to regulatory approvals.

Webcast from  the press and analyst conference:

“The acquisition of Marathon Norway is a big step for Det norske as a company,” said

Karl Johnny Hersvik

Karl Johnny Hersvik

Karl Johnny Hersvik, Chief Executive Officer of Det norske. “Marathon Norway is an excellent fit for Det norske, given the operational expertise, access to cash flow and the production profile it brings. The acquisition is important when it comes to meeting our funding requirements for Ivar Aasen and Johan Sverdrup, and to reducing Det norske’s overall risk profile”.

Strategic rationale

Marathon Norway represents an excellent strategic fit for Det norske:

  • Its portfolio of quality assets comes with limited capital expenditure commitments, low historic tax balances and high near-term production that complement the planned production start of Det norske’s Ivar Aasen and Johan Sverdrup developments.
  • Marathon Norway’s organisation brings significant operational experience from the Alvheim fields, which adds to Det norske’s exploration and development capabilities.
  • Marathon Norway’s assets are geographically focused and are all producing through the Alvheim FPSO that boasts a robust operating track record. Furthermore, the company’s assets are oil rich (80% of the reserves are oil).

After the transaction, Det norske will have 202 million barrels of oil equivalent (boe) of 2P reserves. The plan for development and operation for Johan Sverdrup, scheduled for submission in February 2015, will increase reserves significantly. In addition, the combined company will have contingent resources amounting to 101 million boe, excluding Johan Sverdrup. Further identified upside in Marathon’s portfolio is estimated at approximately 80 million boe. Combined 2013 production for the two companies amounted to approximately 84 thousand boe per day, making Det norske one of the largest listed independent E&P companies in Europe in terms of output.

The strategy and vision of Det norske has always been to create a strong Norwegian E&P company. With this transformational transaction we have achieved our goal well ahead of schedule”, said Sverre Skogen, Chairman of the Board of Det norske. “We believe that there is still high potential on the Norwegian Continental Shelf and Det norske will remain a pure play NCS company”.


Det norske has secured a fully committed and underwritten acquisition loan facility for the full cash consideration. This facility has been provided by BNP PARIBAS, DNB, Nordea and SEB. The company has mandated and is in advanced discussions with the same four banks to finalise a seven year Reserve Based Lending facility of USD 2.75 billion. This long-term facility will replace the acquisition loan and refinance Det norske’s current facilities. As an integral component of the long-term financing plan, the company will strengthen its equity base by issuing the NOK equivalent of USD 500 million in new equity through a rights issue. The company’s largest shareholder Aker Capital AS has pre-committed to subscribe for its 49.99% pro rata share of such rights issue. The remaining 50.01% is fully underwritten by a consortium of banks. With this equity issue, the company has secured the financing of its current work program until first production from the Johan Sverdrup field.

The acquisition of Marathon Norway will increase Det norske’s financial robustness and its ability to absorb the impact of any changes in future capital spend. This will improve the company’s credit profile and reduce the cost of capital.

Set for further growth

After the acquisition Det norske will have more than 450 employees. No redundancies are expected as a result of the transaction given the breadth of opportunities across the growing organisation.

Marathon Norway has a material portfolio of oil-producing assets, and together with Det norske’s development projects, this provides a diversified and balanced asset base and creates a strong platform for future organic growth”, Hersvik said.

The completion of the transaction is subject to approval by the relevant Norwegian and European Union authorities. An extraordinary general meeting of Det norske will be scheduled for late June to approve the rights issue.

J.P. Morgan Limited acted as financial advisor to Det norske on this transaction.

A press and analyst conference will be held today at 09:00 at Felix konferansesenter, Bryggetorget 3 in Oslo. This conference can also be viewed by webcast:

DETNOR presentation – Acquisition of Marathon Norge

Marathon Oil Norge facts:

Proved plus probable reserves (end 2013)* 136 mmboe
2013 net average production** ~80 thousand boe per day
Number of licenses (operatorships)* 13 (10)
Number of employees (31.12.2013)** 218
2013 total revenues** NOK 18.7 billion
2013 pre-tax profit** NOK 13.7 billion

* Source: NPD factpages
** Source: Marathon Oil Norge AS Annual Report 2013

Further financial figures are included in the attachment: Financial Statements Marathon Oil Norge AS


This announcement is not an offer for sale of securities in the United States or any other country. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S. Securities Act. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Any offering of securities will be made by means of a prospectus that may be obtained from the Company when the subscription period commences and that will contain detailed information about the Company and management, as well as financial statements. Copies of this announcement are not being made and may not be distributed or sent into the United States, Canada, Australia, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

In any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any member State, the “Prospectus Directive”), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.

This announcement is only directed at (a) persons who are outside the United Kingdom; or (b) investment professionals within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (c) persons falling within Article 49(2)(a) to (d) of the Order; or (d) persons to whom any invitation or inducement to engage in investment activity can be communicated in circumstances where Section 21(1) of the Financial Services and Markets Act 2000 does not apply.

Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objectives and strategies for the Company, such as planned expansions, investments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in the Company’s markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, as well as (i) statements preceded by “expected”, “scheduled”, “targeted”, “planned”, “proposed”, “intended” or similar statements.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty.  Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized.

No assurance can be given that such expectations will prove to have been correct.  The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

J.P. Morgan Limited is acting for Det Norske, and no one else, in relation to this transaction and shall not be responsible to any person other than Det Norske for providing protections afforded to clients of J.P. Morgan Limited or for advising any other person involved in the transaction.