Spirit exits Norway in deals worth over $1bn
Centrica-owned Spirit Energy announced on December 8 it was divesting from Norway through two deals with Sval Energi and Equinor worth a combined $1.08bn.
Spirit's Norwegian business comprises interests in 11 production fields which netted the company 55,000 barrels of oil equivalent/day in output last year, as well as several development opportunities.
Sval Energi will acquire all Spirit's Norwegian assets save for its stake in the Norwegian section of the Statfjord field that straddles the country's maritime border with the UK, which will be bought by Equinor. Equinor will also acquire its stake in the field's UK section.
Spirit said the deals would help it reduce the carbon intensity of its portfolio, noting that with their completion, the company would be predominantly a natural gas rather than oil business. The company will continue to operate in the UK and the Netherlands, where its focus will be on realising value from remaining reserves and decommissioning assets.
"Over the last 15 years, we have created an attractive cash-generating business in Norway with producing assets, future developments and exciting exploration opportunities," CEO Chris Cox said. "Sval Energi is acquiring a successful and solid business."
The Sval Energi deal alone is worth $1.026bn. It marks the private equity-backed company's sixth acquisition since snapping up Solveig Gas in 2019. Among those deals, it also bought the Norwegian business of Italy's Edison earlier this year.
"Through this transaction Sval is further strengthened with an experienced, competent and accomplished team," CEO Nikolai Lyngo commented. "Spirit Energy's Norwegian portfolio adds material production and gives us a good asset base for further growth on the Norwegian continental shelf."
Sval expects its output to reach 60,000 boe/d in 2023. It said it too would focus on keeping its carbon intensity low, at 6 kg of CO2/boe.
Equinor valued its acquisition at $50mn, noting that there would be an additional contingent payment to be made depending on commodity prices between October 2021 and December 2022. Spirit's minority share in the Statfjord field yielded 21,000 boe/d of production in the third quarter, it said.
Equinor, which already operates Statfjord, recently launched a plan to extend the field's working life towards 2040. Statfjord has been up and running since 1979 and its output peaked at around 715,000 boe/d in 1993 but has since declined significantly. Equinor said it expected to close the deal in the first half of 2022, pending the usual conditions being met.
UK energy group Centrica owns a 69% stake in Spirit, while the company's other owner is Germany’s Stadtwerke Muenchen. The pair reportedly mooted plans to sell the company in late 2019.