By Staff Energy & Commerce
French Total announced the acquisition of 100% of the equity of the E&P company Maersk Oil & Gas, a wholly owned subsidiary of A.P. Møller – Mærsk A/S. The purchase was made considering USD $4.95 billion in Total shares (equivalent to 97.5 million of shares, 3.75% of the enlarged share capital of Total), and it will assume USD $2.5 billion of Maersk Oil’s debt.
The transaction will bring Total as benefits:
- Around 1 billion boe of 2P/2C reserves, 85% of which are in OECD countries (more than 80% in the North Sea), contributing to Total’s continuous balancing of country risks of its portfolio to enhance shareholder value.
- The addition of 160 kboe/d of mainly liquids production in 2018, acquired at an average price of 46 k$/boepd, offering high margins with an estimated free cash flow break-even of less than $30 per barrel and growing to more than 200 kboe/d by the early 2020’s further strengthening Total’s leading production growth outlook.
- Total expects to generate operational, commercial and financial synergies of more than $400 million per year, in particular by the combination of assets of Total and Maersk Oil in North Sea, an area of excellence for both companies
- The transaction is immediately accretive to both earnings and cash flow per share underpinning Total’s dividend profile.
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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. Other regional businesses will be strengthened as well; due clear complementary positions between both companies in the Gulf of Mexico, Argelia, Kenya, Est Africa, Angola, Brazil, Middle-East and North Africa.