Pertra ASA and Det Norske Oljeselskap ASA to combine

This article originates from the news archive of Det norske.

9. October 2007

The Board of Directors of Pertra ASA (“Pertra”), Det Norske Oljeselskap ASA (“NOIL”) and DNO ASA (“DNO”) resolved in board meetings held on Monday 8 October 2007, to execute a combination of Pertra and NOIL. The name of the combined company will be “Det norske oljeselskap ASA”.

The combined company will become Norway’s second largest operator second only to the new StatoilHydro. The combination of the two companies is part of the strategy to establish a mid-cap operating company creating shareholder value. The company will operate 17 licenses offshore Norway and expects to operate 20 exploration wells over the next three years. This higher level of exploration by a Norwegian independent focusing solely in Norway, corresponds to the level of exploration historically conducted by Saga Petroleum and Norsk Hydro, combined.The combination of the companies will be structured as an exchange offer put forward by Pertra. The parties have pre-agreed that DNO will hold a maximum of 39.97% of the combined company.  As a consequence, Pertra intends to acquire all, or the majority of the outstanding
shares in NOIL, with settlement in Pertra shares with an exchange ratio set to 3:1 (3 existing shares in NOIL give 1 new share in Pertra).

DNO has on the 8 October entered into agreements for a secondary sale of a total of 27,572,262 shares in NOIL to professional and institutional investors in Norway and internationally at a price of NOK 24.00 per share. The sale is subject to the fulfilment of the conditions for the combination of the two companies, expected primo/medio November 2007. DNO will subsequent to this sale, hold a total of 71,427,738 shares in NOIL, constituting approx. 60.5% of NOIL.

The major shareholder in NOIL, DNO, has pre-committed to the combination. DNO will receive Pertra shares for its remaining stake in NOIL, giving a total of 39.97 % of the combined company. The exchange offer will be extended to the remaining shareholders in NOIL at the same terms as soon as practically possible.

The combination of the two companies is conditional upon (i) approval of the combination by the involved parties’ general meetings; (ii) satisfactory outcome of confirmatory due diligence investigations, (iii) necessary approvals and clearances obtained from Norwegian authorities, creditors and other third parties, (iv) Pertra’s extraordinary general meeting resolving to issue up to 39,439,924 shares in Pertra to existing shareholders in NOIL, (v) Pertra resolving to put forward an exchange offer of the remaining shares in NOIL on the same terms, (vi) continued listing of the combined company on Oslo Børs ASA, and (vii) a prospectus/ offer document to be approved by Oslo Børs ASA for the listing of the new Pertra shares.

Pertra will, subsequent to the combination, change name to “Det norske oljeselskap ASA”. DNO will be the largest shareholder in the combined company, holding initially approximately 39.97% in order to increase the liquidity of the shares. The parties have further agreed that DNO will reduce its initial ownership position in Pertra by sale, dilution and or dividends to a maximum of 25% at the latest 31 December 2008.

The combined company will have its registered office in Trondheim, with the head office functions split between Trondheim and Oslo. Consequently, the CEO shall have offices in Trondheim and in Oslo, while the CFO and part of the IR management will be
located in Oslo. The combined company will build on the competence centres already established in Trondheim and Oslo as well as the offices in Harstad and Stavanger. The combined company will initially have a staff of around 80 people and will be ideally positioned for further growth, with an expected doubling of the number of employees over the next two years.

The CEO of Pertra, Mr. Erik Haugane, will continue as CEO of the combined company and the chairman of Pertra, Mr. Kaare M. Gisvold, will continue as chairman of the combined company. The company will have 7 shareholder elected directors and two directors elected by the employees¸ one from Oslo and one from Trondheim, respectively.

Pertra and NOIL expects that the conditions will be fulfilled primo/medio November 2007.

Pertra is listed on Oslo Børs and trade with the ticker code “PERTRA”. NOIL is not listed, but is registered on the OTC-list with the ticker code “NOIL”.

Additional financial information will follow shortly.

A presentation of the combined company will be held at Hotel Continental in Oslo on Tuesday 9 October 2007 at 12:00 hours CET. The presentation will be held by Mr. Kaare Gisvold (Chairman of Pertra), Erik Haugane (CEO of Pertra) and Ivar Brandvold (COO of DNO ASA) and Haakon Sandborg (CFO of DNO ASA). The presentation will be published on Oslo Børs/news-web on the companies’ respective ticker-codes.

Pareto Securities ASA has been retained as financial advisor to the combined company and as manager for the completed secondary sale and the exchange offer.