Equinor is to sell its non-operated share in the Greater Ekofisk Area to Sval Energi, alongside a minority share in the Martin Linge field, as part of a $1 billion deal.
The agreement covers 7.604% of Ekofisk area licenses PL018, PL018B and PL275 (including the Ekofisk, Eldfisk and Embla fields, and 6.63922% in the Tor Unit).
The deal will also include the sale of its interest in Norpipe Oil (18.5%), part of the infrastructure transporting oil from the Greater Ekofisk Area to land.
Ekofisk was the first producing field brought online on the Norwegian Continental Shelf in 1971 and is expected to still be producing in 2050. The sale will leave the state-backed group without any ownership interests in the Greater Ekofisk Area.
In addition, Equinor will offload a 19% stake in Martin Linge, but will retain a 51% ownership share and continue as the operator of the field.
Martin Linge started production last year at an overall cost of 63 billion NOK (£5.2billion), with estimated recoverable resources of 260 million barrels of oil equivalent (boe). It is expected to reach peak production of around 115,000 boe in 2022.
The deal includes a cash consideration of $1 billion and a contingent payment structure linked to realised oil and gas prices for both assets for 2022 and 2023, Equinor said.
Banking sources first tipped a potential sale of the assets in December, amid reports the company was looking to make the most of a hot M&A market with strong demand for Norwegian assets.
“Ekofisk has played an important role in Norway and Equinor’s oil and gas journey as the first producing field on the Norwegian Continental Shelf. The Greater Ekofisk Area is an area where Equinor has limited participation, and we have therefore decided to sell our position in the area during a period of high prices and to redirect capital to other core areas for the business,” said Equinor’s senior vice president for E&P south Norway, Rune Nedregaard.
“We are also pleased to announce that the deal includes bringing in Sval Energi as a partner to the Martin Linge field, creating further value from this asset. Martin Linge started production in June 2021 and is now producing very efficiently. We are looking forward to collaborating further with Sval Energi to create more value from Martin Linge going forward.”
Private equity backed Sval said the acquisitions would add 30,000 boepd to its portfolio.
The deal is the company’s seventh acquisition since it was created by fund manager HitecVision in 2019, having most recently agreed a deal to take on Spirit Energy’s Norwegian assets from parent group Centrica for £800m late last year.
The latest acquisition has an effective date of 1 January 2022 and is expected to be completed in the second half of 2022, subject to regulatory approval.
“The transaction fits well with our growth ambition and portfolio. Following the completion of this transaction and the Spirit Energy Norway acquisition, Sval will be on course to reach 100.000 barrels of oil equivalent per day in 2023 and will continue its growth trajectory in the coming years. Together with our partners, we look forward to creating further value from these assets”, added Sval CEO Nikolai Lyngø.
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