Endeavour International has signed a definitive agreement to divest its Norwegian subsidiary, Endeavour Energy Norge, to Verbundnetz Gas for a cash consideration of $150 million.
According to the company, the transaction is subject to certain government approvals and regulatory compliance processes that are expected to be completed within 60 days.
It said that the the company recognizes production potential of its three major United Kingdom field developments. Also the transaction provides the capital to aggressively move the company’s Rochelle, Cygnus and Columbus fields to first production. Collectively, these projects will increase post-divestment production levels by 2011 to more than 20,000 barrels of oil equivalent per day.
Furthermore it said that the financial flexibility and strength to pursue long-term growth strategies are to be streamlined. The proceeds from the sale substantially reduce net debt and enhance financial flexibility which will ensure that the company’s capital structure remains balanced and manageable. After the transaction, Endeavour will have net debt of approximately $50 million.
William Transier, chairman and CEO of Endeavour International, said: We believe the sale of Endeavour Energy Norge (EEN) is in the best interest of Endeavour and its stockholders as it gives the company the financial flexibility and strength to capitalize on its drilling success in the UK and to actively pursue its growth strategy of shorter-cycle, lower-cost opportunities in the US.
