MOL Group announced Thursday that it has successfully completed a deal to acquire 100 percent ownership of Ithaca Petroleum Norge (IPN) from Ithaca Petroleum Ltd, for a price that could reach up to $90 million.
The deal, which is MOL’s first acquisition in Norway, doubles the size of the company’s exploration portfolio, adding 600 barrels of net un-risked best estimate prospective reserves, according to an MOL press release. The initial consideration paid to Ithaca was $60 million, although Ithaca can potentially earn an additional $30 million depending on successful discoveries being drilled on Ithaca Norge’s existing license portfolio between 2015 and 2017.
MOL’s acquisition includes 14 licenses in the Norwegian Continental Shelf, three of which are currently operated by IPN. The investor-friendly nature of Norway and its political and fiscal stability were marked by MOL as key reasons for the group’s decision to acquire IPN.
Alexander Dodds, MOL group executive vice president for upstream, commented in a company statement:
“Entering Norway as one of the most investor friendly countries is an important milestone in our exploration and production strategy. Norway will become a key exploration hub for MOL Group in the future and will help us achieve our goal of becoming an offshore operator in the North Sea. We believe Norway has a best in class approach to exploration, and we know that the new MOL Norge has an excellent team in place.”
Ithaca Petroleum began the transaction for IPN with MOL in April 2015. The sale of Ithaca Norge concludes Ithaca’s restructuring and monetization of the Norwegian operations acquired as part of the acquisition of Valiant Petroleum, in April 2013.
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