OSLO,NORWAY: Vår Energi ASA (OSE: VAR) has agreed to buy 100% of the shares of Neptune Energy Norge AS from Neptune Energy Group Holdings Limited for a cash consideration based on an agreed enterprise value of USD 2.275 billion.

The deal will add scale, diversification and longevity to Vår Energi’s portfolio, which currently includes 39 producing fields and 158 licenses. The acquired assets are complementary to Vår Energi’s current portfolio and highly cash generative with low production cost and limited near-term investments. The deal will also increase Vår Energi’s operatorships and strengthen its partnership with Equinor.

The transaction will add 67 kboepd of daily production for Q1 2023 and ~265 mmboe of 2P reserves (ASR 2022) to Vår Energi, as well as several near- and medium-term growth opportunities. The gas share in the portfolio amounts to 62% of production in Q1 2023.

The deal includes ownership in 12 producing assets, three of which are operated by Neptune Norway: Gjøa (30%), Dvalin (15%) and Cygnus (5%). It also includes ownership in the strategically important Snøhvit gas field (12%) and the associated Melkøya LNG plant, which is the only existing gas export infrastructure in the Barents Sea area.

In conjunction with the transaction, Eni S.p.A (“Eni”), which owns 69.6% of Vår Energi, has agreed to acquire the remaining assets of Neptune group outside of Norway and Germany in a separate transaction. Completion of both transactions is inter-conditional.

Vår Energi expects to realise USD ~300 million in synergies over time, from a robust development and exploration portfolio, improved asset utilisation and commercial optimisation of the gas sales strategy.

Torger Rød, the CEO of Vår Energi, commented: “Neptune Norway is a perfect fit. It will add production of high-value barrels and an asset portfolio supporting long-term sustained value creation and underpin our plan to increase production by more than 50% by end-2025, while significantly reducing unit production cost. The acquisition will strengthen our position in core areas, support continuous asset optimisation and increase operatorships, while providing attractive early phase projects and exploration opportunities. We will also bring together two strong teams to realise our full potential.”

The transaction is subject to customary regulatory approvals and is expected to close in Q4 2023.

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