Shell Sells Danish Offshore Assets for US$1.9 Billion

- October 18th, 2018

Shell’s subsidiary Shell Overseas Limited penned the deal with Noreco that will divest Shell from Denmark’s offshore oil and gas sector.

International fuel supplier Royal Dutch Shell (AMS:RDSA,NYSE:RDS.B) has agreed to sell its shares in Shell Olie-og Gasudvinding Danmark B.V. to the Norwegian Energy Company (FWB:CJ1) for US$1.9 billion.

Shell’s subsidiary Shell Overseas Limited penned the deal with Noreco that will divest Shell from Denmark’s offshore oil and gas sector.

The sale, which is subject to regulatory approvals, should be completed in 2019.

Learn to invest in the oil & gas industry

 
See our report for valuable information
 

“Today’s announcement is consistent with Shell’s strategy to simplify its portfolio through a US$30 billion divestment program, and contributes to our goal of reshaping the company into a world class investment case,’’ Andy Brown, Shell’s upstream director, said in the company announcement.

The monumental deal for Noreco will solidify the energy fuels producer as the second largest oil and gas producer in Denmark, as well as a formidable exploration and production company.

The deal will include proven and probable reserves of 209 million barrels of oil equivalent (mmboe), based on an independent CPR assessment at the end of 2017. According to the assessment, 65 percent of the reserves are liquids.

As part of the deal, Noreco will also acquire a 36.8 percent interest in the Danish Underground Consortium (DUC), previously owned by Shell.

In 2017, Shell’s production share from DUC totaled 67,000 barrels of oil equivalent per day (mboepd).

“We are very proud and grateful to have been part of the Danish Underground Consortium since its inception five decades ago,” Lee Hodder, Shell’s country chair, commented.

“The DUC continues to provide material tax revenues, jobs and energy security to Denmark, and the Tyra redevelopment will ensure that this will be the case for decades to come. I would like to pay tribute to the staff, stakeholders, partners and authorities who have contributed.”

The transaction will be financed through a seven year reserve based loan provided by three international financial institutions. In order to pay Shell the initial payment installment, Noreco will enter into a short term funding agreement for US$35 million.

Shell shares were slightly down on Thursday (October 18), trading at 28.28 euro; while Noreco stock skyrocketed by 46.19 percent to 23.01 euro.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

2018 Energy Market Report

 
Download your report to see how battery tech and oil markets will do this year.

 

Get the latest Gas Investing stock information

Get the latest information about companies associated with Gas Investing Delivered directly to your inbox.

Gas Investing

Select All
Select None

By selecting company or companies above, you are giving consent to receive email from those companies. And remember you can unsubscribe at any time

Leave a Reply

Your email address will not be published. Required fields are marked *