Current XOM Stock Info

Deal value estimated at $935 million

ExxonMobil (ticker: XOM) is selling its operated upstream business in Norway to HitecVision and Point Resources, according to a release from Point. While the purchase price was not released, Bloomberg estimated in September that such a sale could fetch over $1 billion. According to a Norwegian financial newspaper, Dagens Naeringsliv, the deal was valued at $935 million.

HitecVision is a private investing firm focused on offshore hydrocarbon production. HitecVision reports that since 1994 it has invested in, acquired or established ten E&P companies. Three of these companies merged in 2016 to form Point Resources, which describes itself as a “full cycle E&P company on the Norwegian Continental Shelf.” In 2016, Point produced about 6,400 BOEPD from its offshore properties. The operations acquired in this transaction will be merged with Point to form a mid-sized E&P company.

ExxonMobil Sells Operated Norwegian Fields

Pre-Merger Point Operations       Source: Point Resources

Five fields will be sold, the producing Balder, Rignhorne, and Ringhorne East fields; the partially developed Forseti field; and the Jotun, where production ceased in 2016. The Jotun A floating production facility and ExxonMobil’s Sandnes offices are also included in the sale. In 2016, these fields produced a combined 54,000 BOEPD, meaning that Point Resources’ production will grow tenfold from 6,400 BOEPD to 60,400 BOEPD.

Ten wells drilled in next five years

Point is currently identifying development prospects for its newly-acquired properties. It currently expects to drill ten wells in the next five years on the three producing fields, continue developing the Forseti field, and explore adjacent leases for other fields.

According to Bloomberg, Exxon will also transfer its operatorship of the Sigyn field to Statoil. This means ExxonMobil will no longer be an operator in Norway, where it has maintained a presence since the 19th century. It will retain its non-operated interest in several offshore Norwegian fields, though. ExxonMobil reports that its interest in these fields produced a net 460 BOEPD in 2016.

Jan Harald Solstad, Point Resources CEO, commented on the acquisition, saying “the combination of ExxonMobil’s Norwegian operated business with Point Resources will create a new significant Norwegian E&P company, with plans to invest more than 20 billion kroner [$2.35 billion] on the Norwegian Continental Shelf over the next five years. The two portfolios are highly complementary with strong near-term production and a portfolio of top-tier, low-cost development projects.”


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