Harbour Energy reached an agreement with Wintershall Dea shareholders BASF and LetterOne to buy its upstream assets in Europe, South America, North America and Africa. (Source: Shutterstock)
Harbour Energy has agreed with BASF and LetterOne, the shareholders of Wintershall Dea AG, to acquire substantially all of Wintershall Dea’s upstream assets for $11.2 billion in cash and stock, according to a Dec. 21 press release.
Wintershall Dea’s portfolio includes upstream assets in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria, as well as Wintershall Dea’s CO2 Capture and Storage (CCS) licenses in Europe. Wintershall Dea's Russian assets are not part of the deal.
The acquisition will add 1.1 Bboe of proven and probable (2P) reserves at about $10/boe and production averaging more than 300,000 boe/d at about $35,000 per flowing boe.
“The acquisition is expected to transform Harbour into one of the world’s largest and most geographically diverse independent oil and gas companies, adding material gas-weighted portfolios in Norway and Argentina and complementary growth projects in Mexico,” Harbour said in a press release.
Harbour said it will also benefit from an increased reserve life and improved margins with lower operating costs and greenhouse-gas intensity.
Harbour said it expects to receive investment grade credit ratings and to benefit from a significantly lower cost of financing resulting from the porting of existing euro-denominated Wintershall Dea bonds with a nominal value of about $4.9 billion and a weighted average coupon of 1.8%.
The acquisition is also accretive to Harbour’s free cash flow, supporting enhanced and sustainable shareholder returns, the company said.
Pro forma for the transaction, Harbour’s combined production will average more than 500,000 boe/d with 2P reserves of 1.5 Bboe. The company said the combination will generate revenue of $5.1 billion and EBITDAX of $3.7 billion for six months to end June 2023.
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