Aker BP secures extra financing for Hess Norge buy

Norwegian oil company Aker BP has secured additional bank financing for the previously announced acquisition of Hess Norge. 

The oil company said on Monday it had received an offer from a consortium of five banks for a $1.5 billion bank facility to finance the acquisition.

To remind, U.S. energy company Hess Corporation made an agreement last week to sell its oil and gas interests in Norway to Aker BP for total proceeds of $2 billion.

The transaction includes Hess Norge’s interests in the Valhall (64.05 percent) and Hod (62.5 percent) fields. Aker BP will also assume Hess Norge’s tax positions, which include a tax loss carry forward with a net nominal after-tax value of $1.5 billion, as booked in Hess Norge’s 2016 annual accounts. Through the transaction, Aker BP will become the sole owner of the Valhall and Hod fields. Aker BP said it would finance the transaction through its existing long-term Reserve Based Lending bank facility, and by the issuance of $500 million in new equity.

Back to current events, Aker BP stated on Monday that the facility would carry an interest of LIBOR + 1.5-2.0 percent, and will be secured by a pledge in the shares of Hess Norge. The duration of the facility is 18 months from the date of completion of Aker BP’s acquisition of Hess Norge.

“Through this new facility, Aker BP will further reduce its financing costs, and retain the full flexibility of its existing $4 billion reserve-based lending facility,” said Aker BP CFO Alexander Krane.

Also on Monday, the Norwegian oil company announced a quarterly profit of $112 million, up from $63 million a year ago.

When it comes to the company’s issuance of new equity, Aker BP said early on Tuesday that its private placement of 22,376,438 new shares in the company had been successfully subscribed, raising gross proceeds of NOK 4.084 billion ($500M).

The price per share was NOK 184 per share, consisting of a subscription price of NOK 182.5 per share and NOK 1.5 per share as payment for the associated right to cash dividend of $0.185.

Offshore Energy Today Staff

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