Aker BP Raises $1.5 Billion in Debt Instrument Sale

Aker BP ASA has completed issuing dollar-denominated senior notes due 2034 and 2054 with an aggregate principal amount of $1.5 billion.

The 10-year bonds worth $750 million have a 5.125 percent interest while the 30-year ones, which also have a principal amount of $750 million, have a 5.8 percent interest. The coupons are payable semi-annually.

The oil and gas exploration and production company priced the 2034 and 2054 notes at about 99.7 percent of the notes’ principal amounts.

Fornebu, Norway-based Aker BP plans to use proceeds for “general corporate purposes” and the redemption of outstanding notes maturing 2025 and 2026, for which it had already launched a purchase offer, according to regulatory disclosures.

Of the notes due in the next two years, Aker BP said, “The Company has accepted for purchase all the Notes that were validly tendered and not validly withdrawn as of the Expiration Date”.

Earlier, it completed a buyback program for up to one million shares. The actual purchase under the plan announced June 4 consisted of 600,000 shares. Aker BP now owns 0.21 percent of its share capital, equivalent to 1,328,456 shares, it said September 26.

Aker BP had current liabilities of $4.2 billion as of the end of the second quarter. That included $2.5 billion of tax payable and $95 million of short-term bonds.

Its current assets totaled $5.2 billion, including $3.2 billion in cash and cash equivalents.

For the April–June period Aker BP logged $561 million in net profit, or $0.89 in earnings per share — up compared to the prior quarter and the corresponding quarter last year. EBITDA for the second quarter of 2024 stood at $3 billion.

It has revised the lower end of its output guidance for 2024 to 420 barrels of oil equivalent a day (MMboed) after producing 444 MMboed in the second quarter. The upper end of the projection remains at 440 MMboed.

“Production cost was USD 6.4 (6.1) per barrel produced, below the full-year guidance of USD 7 due to strong operational performance and currency effects”, Aker BP said.

Chief executive Karl Johnny Hersvik said, “… all our field development projects remain on track, poised to drive profitable growth for Aker BP into the next decade”.

Aker BP’s value creation plan includes a target to raise dividends by at least five percent a year. For 2024, it plans to distribute $2.4 in dividends per share, up nine percent and continues a consistent increase since 2021.

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