Norway's Equinor has agreed with Sweden's Lundin Petroleum to divest a 16 per cent shareholding in Lundin for a direct interest of 2.6 per cent in the Johan Sverdrup field.
Under the terms of the agreements, Equinor will divest around 54.5 million shares in Lundin at a price of SEK 266.4 per share. Total consideration for the divestment of shares in Lundin amounts to around US$1.56 billion. Equinor will acquire a 2.6 per cent direct ownership share in the Equinor operated Johan Sverdrup field for a cash consideration of US$910 million.
Eldar Sætre, president and CEO of Equinor, said: "Since 2016 we have more than doubled the value of our investment in Lundin. This transaction gives us the opportunity to capitalise on this value creation, and at the same time increase our direct ownership in the Johan Sverdrup field. We are on track to start production in November this year, and an increased direct ownership share gives us the opportunity to create even more value for our shareholders."
Following completion of the transactions, Equinor will have a 42.6 per cent ownership share in the Johan Sverdrup field and own a 4.9 per cent shareholding in Lundin Petroleum.
The agreement includes a contingent payment of up to USD 52 million payable to Lundin in 2025 if Johan Sverdrup proves to be at the upper end or above the indicated resource range of 2.2 – 3.2 bn boe.
The deal is subject to certain conditions, including customary government approval and approval in Lundin Petroleum Extraordinary General Meeting on 31 July 2019. The closing of the acquisition of the interest in Johan Sverdrup transaction is expected by Q4 2019.