DNO ASA mentioned its Norwegian working subsidiaries have entered into an offtake settlement with France’s ENGIE SA for the corporate’s Norwegian gasoline manufacturing.
The offtake settlement covers the whole thing of DNO’s Norwegian gasoline manufacturing following its acquisition of Sval Energi Group AS, the corporate mentioned in a information launch.
The four-year settlement is efficient October 1 and “provides premium pricing,” DNO mentioned.
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Associated to the settlement, DNO mentioned it has entered into an offtake financing facility with an undisclosed U.S. financial institution for as much as $500 million. Below the power, the financial institution funds DNO the worth of as much as 270 days of scheduled gasoline manufacturing based mostly on future gasoline gross sales receivables.
The all-in rate of interest for drawn quantities beneath the power is “considerably beneath” typical reserve-based lending (RBL) phrases accessible to DNO, with no expenses for undrawn quantities, DNO mentioned, including that there aren’t any monetary covenants associated to the power.
Proceeds from the offtake financing facility might be used to switch Sval Energi’s current related services in addition to for common company functions, DNO said.
“We have now acquired robust curiosity by consumers to prepurchase our enlarged North Sea manufacturing of 80,000 barrels of oil equal per day cut up about equally between oil and gasoline,” DNO Government Chairman Bijan Mossavar-Rahmani mentioned.
“These three-way transactions are made attainable as a result of consumers are desirous to lock in safe provides of Norwegian oil and gasoline and U.S. banks, specifically, have considerably stepped up fossil gas lending,” he added.
DNO mentioned it has repaid and won’t renew over $ 600 million in RBLs throughout its North Sea subsidiaries, “given [the] availability of enticing offtake financing phrases”.
As well as, the corporate has borrowed $300 million beneath a one-year financial institution bridge mortgage “so as to add extra arrows to our quiver,” Mossavar-Rahmani mentioned.
Individually, DNO can be in talks to determine an offtake settlement and associated financing facility on comparable phrases for its North Sea oil manufacturing, in line with the discharge.
Final month, DNO closed its acquisition of Sval Energi from HitecVision for money consideration of $450 million based mostly on an enterprise worth of $1.6 billion.
The acquired portfolio consists of 16 producing fields in Norway, quadrupling DNO’s North Sea manufacturing to 80,000 barrels of oil equal per day (boepd), the corporate mentioned in an earlier assertion.
Sval Energi has non-operated pursuits in 16 producing fields offshore Norway, with web manufacturing of 64,100 boepd in 2024, and 141 million boe (MMboe) in web 2P reserves and 102 MMboe of web 2C sources. Its largest belongings, measured by web 2P reserves, are Nova, Martin Linge, Kvitebjørn, Eldfisk, Maria, Symra and Ekofisk.
With a balanced portfolio cut up about equally between liquids and gasoline, there may be further upside and manufacturing potential from natural development in producing belongings, fields beneath growth, akin to Maria Revitalization, Symra, and Dvalin North; and discoveries akin to Cerisa, Ringhorne North, and Beta; and redevelopment alternatives akin to Albuskjell and West Ekofisk, DNO mentioned.
On account of the acquisition, the corporate mentioned its North Sea confirmed and possible (2P) reserves elevated to 189 MMboe, whereas its contingent sources (2C) reached 316 MMboe.
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