"This transaction represents a quantum leap in the development of Altinex. With production from 6 fields, several interesting discoveries and promising exploration projects in the portfolio, this acquisition provides a series of opportunities for our organisation," said Brian Jepsen, Chairman of Altinex.
Denerco Oil is a privately owned upstream Danish oil and gas company founded in 1985, headquartered in Copenhagen and with activities in the Danish, German, Dutch and UK sectors of the North Sea as well as onshore Oman.
The Denerco Oil organisation employs 26 highly skilled people and has over the years had an above-average exploration success rate. Joined with the Altinex Oil organisation the combined company will be well positioned to undertake further exploration- and production projects. The company is today operator in both Germany and the Netherlands. When the Danish 6th round licenses are officially granted later this month, Denerco Oil will also become operator in Denmark.
The proved and probable (P1 + P2) reserves in the producing fields are evaluated to approximately 20 mmboe with an additional upside (P3) of some 6 mmboe. The reserve figures have been audited by the renowned and independent reservoir-evaluation company DeGolyer and MacNaughton in February 2006.
The combination of the Altinex portfolio, consisting of nine Norwegian licenses (including the Brage field producing in the range of 3200 boepd) and Denerco Oil's assets will create a well balanced portfolio of production, development and exploration projects with low political risk. This will form a solid basis for long-term activity and further growth.
"This deal is a breakthrough in our strategy of building a stronger Altinex. In addition to broadening our portfolio of licenses, Denerco Oil contributes a strong team of subsurface specialists which is essential in order to exploit and develop the international asset base we have acquired," said Olaf Ellingsen, President of Altinex ASA.
The estimated impact to Altinex 2006 financials, at an oil price of USD 60/bbl, is a revenue increase of approximately NOK 1 360 millions and an EBITDA increase of approximately NOK 1 150 million. The Danish corporate tax is 28 %.
The purchase price is fully financed with funds coming from reserve-based lending (loan agreement entered into), treasury cash, and a guarantee for full subscription of a bond offering and a share offering issued by companies controlled by Oystein Spetalen, Idar Vollvik and Petter Stordalen for the amount of NOK 1,005 million.
The guarantee will be replaced by funds from a planned bond issue, expected to amount to approximately NOK 660 million, and a share issue. The board of Altinex ASA will within a short period of time decide whether the share issue will be conducted in the form of (i) a rights offering with transferable subscription rights issued to current shareholders, (ii) a public share offering or (iii) a directed share issue. This decision will be made consulting our financial advisors SEB Enskilda, Pareto and Handelsbanken.
To reduce the risk and protect against a fall in oil prices going forward, a three-year hedging program with a minimum oil price of $ 50/bbl through the use of put options will be established.
The acquisition of Denerco Oil is subject to approval by the regulatory authorities.
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