L1 Energy ambition is to build a safe, sustainably growing energy group, which is recognized as a partner of choice in its industry.
“We have started with a
Lord Browne of Madingley
clean sheet of paper and a
clear aim: to build a new
world-class global energy
group, fit for the 21st
Executive Chairman of L1 Energy
L1 Energy aim to do this through acquiring and then developing a portfolio of several regionally focused platforms, and by entering the rapidly evolving markets for alternative energy and energy infrastructure.
We invest for the long term, bringing strategic expertise, capital and rigorous performance management to a portfolio of regionally focused platforms. Our activity aims to create value both for shareholders and for the rest of society through the provision of safe and reliable energy.
L1 Energy aims to deploy capital in stable political and regulatory regimes, while maintaining careful control of costs and cash flows, and returning dividends to shareholders.
Our target is to achieve growth above, and to keep costs below, our peer-group average, and to build an energy group which demonstrates excellence in everything it does.
L1 Energy’s first acquisition was the German oil and gas company DEA, from RWE AG. L1 Energy has been working with DEA to accelerate the company’s rate of expansion by making capital available for selective business development activity in core countries.
Refocusing DEA on core key markets
Since the acquisition of DEA in March 2015, L1 Energy has worked with the company to re-equip it for today’s market environment and to refocus it around core areas of competency. DEA is now focused on Norway, Germany, Denmark, Egypt and Algeria. Non-core positions around the world are being divested or discontinued, and exposure to a single project in the Egyptian West Nile Delta was reduced to an acceptable level via a successful farm-down to BP.
DEA has also been deployed as an ‘incubator’ for nascent activities in new geographies, including Mexico, where L1 Energy believes that the company’s technical capability and strategic relationships will create long-term value.
L1 Energy is working with DEA, helping the company to expand by utilising its competitive advantages, operating efficiency, environmental stewardship and stakeholder engagement.
Following a decision by the previous UK Government DEA sold its interests in DEA UK. DEA reinvested the proceeds in Norway by acquiring E.ON’s exploration and production business in December 2015. This acquisition more than doubled DEA’s production in Norway. It marks a step-change in the company’s presence on the Norwegian continental shelf, and creates important opportunities for further growth.
The new UK Government, in a letter from a senior official of the Department of Energy & Climate Change (DECC), has stated to L1 that the Secretary of State’s decision to require the on-sale of DEA UK was not a judgement on the suitability of L1’s owners to control these or any other assets in the UK.
DEA operates Mittelplate Drilling
and Production Island in the Wadden
Sea National Park off the coast of
Schleswig-Holstein in North Germany.
Creating platform for growth
Like all of its peers, DEA has had to respond to the recent weakness in commodity markets. As the price of oil has fallen significantly from its peak, the company has implemented a cost-cutting programme. This has enabled DEA to generate positive free cash flow in 2015 while growing production by 10%.1 In 2015 DEA produced 114,000 barrels of oil equivalent per day (BOE/D).
DEA’s leadership has been strengthened by the appointment of three new members to its Supervisory Board, all of whom are German business leaders of global standing who will bring their deep expertise and experience to the business.
L1 Energy will focus on ensuring that DEA is both resilient to the new market environment, and that it has the tools and resources to grow.
Excluding DEA (UK) and newly acquired assets
DEA 2015 performance
Reserves & contingent resources (2015)
1,325 MM BOE
MM BOE = million barrels of oil equivalent