Norwegian oil and gas operator DNO has signed an agreement to acquire Sval Energi Group from HitecVision to bolster its presence in the North Sea.
As agreed, DNO will buy all Sval Energi shares for a cash consideration of $450m, which provides the deal with an enterprise value of $1.6bn.
The transaction will be financed through DNO’s existing liquidity and available credit facilities, with plans to establish an optimal capital structure before completion.
DNO said that the deal will enhance the company’s global net production by two-thirds, reaching approximately 140,000 barrels of oil equivalent per day (boepd) on a 2024 pro forma basis. Proven and probable reserves are expected to increase by 50% to 423 million barrels of oil equivalent (boe).
In the North Sea, 2P reserves will rise from 48 million boe to 189 million boe, and 2C resources will grow from 144 million boe to 246 million boe. DNO’s North Sea production will also quadruple to around 80,000 boepd, making the region the largest contributor to the company’s net production by accounting for about 60% of the total output.
Additionally, Sval Energi’s acquisition is anticipated to deliver tax synergies, general and administrative savings, and reduced borrowing costs for DNO. It will also strengthen the company’s presence on the Norwegian Continental Shelf, where it has achieved significant exploration success since 2020 with 14 discoveries.
Sval Energi’s holdings include 141 million boe in net 2P reserves and 102 million boe of net 2C resources, with major assets such as Nova, Martin Linge, and Ekofisk. The portfolio, which includes interests in 16 producing fields offshore Norway, is expected to provide development synergies with DNO’s existing discoveries.
DNO executive chairman Bijan Mossavar-Rahmani said: “This is a rare opportunity to acquire a portfolio of high-quality oil and gas assets on the Norwegian Continental Shelf, and we have moved fast to capture it.” He added: “Given low unit production costs and limited near-term investment requirements, the Sval Energi portfolio is highly cash generative and will help underpin development of the numerous discoveries we have made in Norway recently.”
DNO plans to integrate Sval Energi’s team of 93 employees into its organisation.
The transaction, effective from January 1, 2025, is expected to close by mid-2025, pending regulatory approvals from Norwegian authorities.
Pareto Securities and Advokatfirmaet Thommessen are advising DNO on financial and legal matters, respectively.
Last year, DNO’s wholly-owned subsidiary DNO Exploration UK signed an agreement to acquire a 25% interest in the Arran field.
