L1 Energy’s ambition is to build a safe, sustainably growing global energy group.
In 2015 L1 Energy acquired the German oil and gas company DEA from RWE. This acquisition gave L1 Energy a growth platform in Europe, North Africa and, since 2017, Mexico.
Merger of L1 and BASF oil & gas businesses to create Europe’s largest independent oil and gas company.
On 27th September 2018 LetterOne and BASF signed a Business Combination Agreement to merge their oil and gas businesses and create Wintershall DEA. LetterOne will initially own 33% of the combined company.
Wintershall DEA will be the largest independent European exploration and production company, with activity in twelve countries across Europe, Latin America, North Africa and the Middle East.
The combined Wintershall DEA business would have had pro-forma production of approximately 575,000 barrels of oil equivalent per day in 2017, almost 70% of which comes from natural gas. In 2017, it would have generated revenue of €4.7 billion and earnings before interest, taxes, depreciation and amortisation (EBITDA) of €2.8 billion.
Based on the combined proven (1P) reserves of almost 2.2 billion barrels of oil equivalent at the end of 2017, the reserves to production ratio of the combined business would be approximately 10 years.
Wintershall DEA will be jointly headquartered in Hamburg and Kassel. Mario Mehren, Chief Executive Officer (CEO) of Wintershall, will be the CEO of Wintershall DEA. Maria Moraeus Hanssen, CEO of DEA, will be the deputy CEO and Chief Operating Officer.
LetterOne and BASF have now begun the process of seeking regulatory approvals, a process which is expected to be complete by the middle of 2019.
“Wintershall DEA is the largest E&P merger in Europe for over a decade, and will have a diverse portfolio of outstanding growth prospects, with the scale needed to access important new opportunities.”Lord Browne of MadingleyExecutive Chairman of L1 Energy
Wintershall DEA positioned to evolve rapidly into a world-class oil & gas company.
The combined portfolio and scale of Wintershall DEA will provide significant potential for sustainable, long-term growth. Production is expected to rise to between 750,000 and 800,000 barrels of oil equivalent per day in the early 2020s as the company executes its business plan.
LetterOne and BASF expect to be able to realise synergies equivalent to at least €200mn per annum, and in the medium term, intend to offer shares in the company to the public through an initial public offering.
DEA strong operational and financial performance
DEA’s production in 2017 averaged 125 kboe/day. Higher commodity prices and strong operational performance meant that the company generated EBITDAX of more than USD $1 bn, significantly above expectations.
In Norway, an important growth area for the company, DEA increased its share to 55% of Dvalin and the Ministry of Petroleum and Energy approved the plan for the development of the field. Engineering and detailed planning work for the new modules for the Heidrun platform and the subsea production system are expected to begin this year. Production is due to start in 2020.
Investment plans in the Njord and Bauge fields in the Norwegian Sea, in which DEA has a 50% and 27.5% share respectively, were also approved by the ministry. These projects alone will lead to investment of more than EUR 2 bn in the Norwegian Continental Shelf. Production is expected to begin in the fourth quarter of 2020.
In Egypt, production at the BP-operated West Nile Delta began ahead of schedule and is above planned levels at the first two fields, Taurus and Libra. DEA has a 17.25% share in the North Alexandria and West Mediterranean Deep Water concessions.
In Mexico, DEA, together with Pemex, won the tender for shallow water exploration block 2 in the Tampico-Misantla basin. DEA also acquired a 50% share and operatorship of the Ogarrio onshore oilfield. The field’s gross production is around 12,500 boe/d, with significant potential for growth through the application of DEA’s expertise in field redevelopment.
A successful start was made to production from the Reggane Nord project in the Algerian Sahara. Up to 280 million cubic feet of gas (approx. 9,000 barrels of oil equivalent) per day are planned for 2018. The first 10 wells have been put into production.
L1 Energy portfolio
DEA is an international exploration and production company for oil and gas.