Germany-based E.ON has agreed to sell 100% of its stake in its Norwegian oil and gas business E.ON E&P Norge to DEA Deutsche for $1.6bn.

E.ON E&P Norge, which holds the portfolio of E.ON’s oil and gas North Sea upstream business, was put under strategic review in November last year.

According to E.ON, the divestment of this business represents a step forward in the review process.

E.ON CFO Michael Sen said: "The successful sale of our E&P business in Norway is a landmark transaction in the sector; as an important step in our overall financial framework it provides flexibility to implement our strategy and reposition the group."

E.ON E&P Norge holds equity interests in 43 licences, and the deal is expected to add production of around 45,000boe/d through working interests in Skarv (28.1%), Njord (30%) and Hyme (17.5%) fields.

Under the deal, DEA will also acquire interests in Snilehorn, Snadd and Fogelberg, as well as a portfolio of exploration licences on the Norwegian Continental Shelf.

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"It will grow our reserves, significantly increase our production and add growth optionality to our portfolio."

The acquisition would enable DEA to double its existing production in Norway to 75,000boe/d.

The acquisition also provides DEA with access to growth options through material development as well as exploration.

DEA Deutsche CEO Thomas Rappuhn said: "It will grow our reserves, significantly increase our production and add growth optionality to our portfolio.

"In addition, we continue to work on further growth in Europe and North Africa by progressing development projects in our portfolio, as well as by pursuing M&A opportunities in these regions."

The deal is subject to approval by Norwegian authorities and the European Commission.

Image: E.ON drilling platform in North Sea, Germany. Photo: courtesy of E.ON SE.