UK’s Harbour Energy has signed a deal with BASF and LetterOne to acquire Wintershall Dea’s upstream oil and gas assets for $11.2bn.
This acquisition, which excludes Wintershall Dea’s Russian assets, encompasses producing and development assets, exploration rights in several countries, and carbon capture and storage (CCS) licenses.
The assets included in the deal are in Algeria, Argentina, Denmark, Egypt, Germany, Libya, Mexico and Norway.
Harbour said the acquisition will add 1.1 billion barrels of oil equivalent (boe) of 2P reserves to its portfolio at an estimated cost of $10/boe and boost production by more than 300,000 barrels of oil equivalent per day (boepd) at approximately $35,000/boepd.
The addition of material gas-weighted portfolios in Norway and Argentina, along with growth projects in Mexico, is anticipated to extend Harbour’s reserve life, enhance margins, and reduce both operating costs and greenhouse gas (GHG) intensity.
Upon closing, Wintershall Dea’s shareholders BASF and LetterOne will receive a total cash consideration of $2.15bn and new shares in Harbour.
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Together, BASF and LetterOne will own a 54.5% stake (BASF 39.6% and LetterOne 14.9%) in the enlarged Harbour following the deal.
Wintershall Dea’s headquarters or its associated staff are also not covered in the deal, necessitating a restructuring that will result in the closure of the company’s Kassel and Hamburg offices, affecting approximately 850 employees.
However, Harbour plans to integrate some of these employees into its operations post-acquisition.
Harbour CEO Linda Z Cook said: “The addition of Wintershall Dea’s assets will increase our production to over 500 kboepd [500,000boepd], extend our reserves life, and enhance our margins and cash flow, all supporting enhanced shareholder returns over the longer run.
“Importantly, the acquisition also advances our energy transition objectives by shifting our portfolio towards natural gas, lowering our GHG emissions intensity and expanding our CCS interests into new European markets.”
BASF chief financial officer Dirk Elvermann said: “In addition to the cash component, the shares in Harbour that BASF will receive upon completion of the transaction offer significant potential for value creation and allow for a gradual and optimised exit from the oil and gas business over the next few years.”
Subject to regulatory approvals and other closing conditions, the acquisition is expected to be completed in the fourth quarter of 2024.
In August, Harbour reached an agreement to divest its assets in Vietnam.