Norway’s DNO ASA has reached an agreement to acquire 100% of Sval Energi Group AS’ shares from European private equity firm HitecVision for $450 million cash, which DNO said is based on an enterprise value of $1.6 billion.
DNO said March 7 that the acquisition would quadruple its North Sea production to about 80,000 boe/d, “propelling the Company to the upper ranks of Norwegian Continental Shelf [NCS] players.”
Post-closing, DNO said its proven and probable (2P) reserves will increase by 50% to 423 MMboe. In the North Sea, its 2P reserves will grow to 189 MMboe from 48 MMboe.
The Sval Energi assets are complementary to DNO’s North Sea portfolio and include non-operated interest in 16 producing fields offshore Norway, with net production of 64,100 boe/d in 2024. The assets include 141 MMboe in net 2P reserves.
Overall, the transaction will boost DNO’s global net production by two-thirds to about 140,000 boe/d on a 2024 pro forma basis.
“This is a rare opportunity to acquire a portfolio of high-quality oil and gas assets on the Norwegian Continental Shelf,” said DNO Executive Chairman Bijan Mossavar-Rahmani, “and we have moved fast to capture it.”
“Given low unit production costs and limited near-term investment requirements, the Sval Energi portfolio is highly cash generative and will help underpin development of the numerous discoveries we have made in Norway recently,” he said.
The deal adds scale and diversifies the company’s position as a leading listed European independent oil and gas company, DNO said in a press release. DNO said it will also capture tax synergies, G&A savings and will lower its borrowing costs with the acquisition. A team of 93 employees will be integrated into the DNO organization.
Sval Energi portfolio
Sval Energi’s largest assets (measured by net 2P reserves) are Nova, Martin Linge, Kvitebjørn, Eldfisk, Maria, Symra and Ekofisk. DNO said the portfolio is highly cash generative, with 2024 cash flow from operations totaling $565 million. Last year’s production costs were $14/boe.
DNO said it would capitalize on Sval Energi’s extensive portfolio, which includes interests in hubs and existing tiebacks that provide potential development synergies with DNO discoveries.
Since 2020, DNO had made 14 discoveries in the NCS, including Bergknapp/Åre, Bergknapp, Carmen, Cuvette, Heisenberg, Kveikje, Mistral, Norma, Ofelia, Othello, Overly, Ringand, Røver Nord and Røver Sør, together adding contingent resources (2C) of around 100 MMboe net to DNO.
Sval Energi’s assets also add potential upside and production from organic growth in producing assets, fields under development—Maria Revitalization, Symra, Dvalin North— as well as its Cerisa, Ringhorne North and Beta discoveries.
Sval Energi’s MLK wind farm will be carved out prior to closing and is not part of the transaction.
Deal financing
DNO said the acquisition will be financed with existing cash and other debt financing facilities. At year-end 2024, the company held $900 million in cash and $100 million liquidity under its reserve-based lending (RBL) facility. Additional funding sources include new bond and RBL debt as well as offtake-based financing.
The effective date of the transaction is Jan. 1. The deal is expected to close by mid-year 2025, subject to customary regulatory approvals from the Norwegian Ministry of Energy, the Norwegian Ministry of Finance and competition authorities.
Pareto Securities is acting as financial adviser to DNO and Advokatfirmaet Thommessen as legal counsel.