French energy company Total informed that it has acquired 100% of the equity of Maersk Oil & Gas A/S, a wholly owned subsidiary of the Danish A.P. Møller – Mærsk A/S, in a share and debt transaction.
Under the agreement, A.P. Møller – Maersk will receive a consideration of $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil’s debt. Total will issue to A.P. Møller – Maersk A/S, 97.5 million of shares, based on the average Total share price on the 20 business days prior to August, 21 (signing date) which will represent 3.75% of the enlarged share capital of Total.
The proposed transaction is subject to the applicable legally required consultation and notification processes for employee representatives and to approvals by the relevant regulatory authorities. The transaction is expected to close in first quarter 2018 and has an effective date of 1st July 2017.
Through the acquisition, Total expects to enhance competitiveness and value in many core areas, in particular through some high quality growing assets and through the delivery of synergies.
Key themes of transaction
- Acquisition transforms Total’s North West Europe outlook.
- This transaction will make Total the second largest operator in the NW Europe offshore region which is the 7th largest oil and gas producing region globally. Post completion, Total will operate over 500 kboe/d (gross) production in this region.
- The transaction strengthens Total’s existing North Sea offshore producing business in UK and Norway. The addition of Maersk Oil’s world class assets, including the operated UK gas field Culzean (49.99% Working Interest), close to the Elgin-Franklin hub operated by Total, and its stake in the giant Johan Sverdrup oil development (8.44% Working Interest) in Norway will bolster Total’s production profile in these countries.
- The transaction adds a new production hub with Maersk Oil’s operatorship and 31.2% ownership of the DUC producing assets in Denmark with net production in 2018 estimated at around 60 kboe/d. Maersk Oil has been the leading operator in Denmark for almost 50 years. The pooling of Total’s and Maersk Oil’s technology and operating expertise will optimize the long term value potential of the DUC assets to the benefit of Denmark and Total shareholders.
- The transaction also will strengthen other core Total regional businesses due to clear complementary positions between Total and Maersk Oil including:
-consolidating Total’s US Gulf of Mexico presence with the Maersk Oil interest in the Jack development in the Wilcox formation
-becoming the second largest IOC in Algeria by production
-complementing Total’s leading East Africa position via Maersk Oil’s Kenya assets
-strengthening of Total’s Kazakh business via addition of operated production
-benefiting of potential upsides in Angola and Brazil
-pooling of Total and Maersk Oil geological and operational expertise in Middle East – North Africa Region.
Commenting on the transaction, Patrick Pouyanne, Chairman and CEO, said: “The combination of Maersk Oil’s North Western Europe businesses with our existing portfolio will position Total as the second operator in the North Sea with strong production profiles in UK, Norway and Denmark, thus increasing exposure to conventional assets in OECD countries.”
.@Maersk sells @maerskoil to @Total and will focus on the containerised supply chain pic.twitter.com/BOqLGbuf3T
— Olaf Merk (@o_merk) August 21, 2017
