L1 Energy’s ambition is to build a safe, sustainably growing energy group, which is recognised as a partner of choice in its industry.
Plan to create Europe’s largest independent oil and gas company.
The oil and gas industry faces a period of lower growth and lower prices. In that environment, consolidation is the natural response.
In December, L1 Energy signed a Letter of Intent with BASF to combine DEA with Wintershall, creating Europe’s largest independent oil and gas company. It is envisaged that BASF will initially hold 67% and L1 Energy hold 33% of the new merged entity, which will operate under the name Wintershall DEA.
L1 Energy and BASF are currently conducting confirmatory due diligence, and expect to close a transaction in the second half of 2018, subject to customary regulatory approvals. Until closing, DEA and Wintershall will continue to operate as independent companies.
The merger of Wintershall and DEA would create a company with the scale needed to generate sustainable growth long into the future. It will operate with joint leadership, joint governance, and joint headquarters, marking the beginning of a new partnership which will reshape the European energy landscape.
Wintershall DEA will be one of Europe’s largest independent E&P CompaniesLord Browne of MadingleyEXECUTIVE CHAIRMAN OF L1 ENERGY
L1 Energy is making good progress towards achieving its ambition to build a safe, sustainably growing global energy group. Its first acquisition was the German oil and gas company DEA, from RWE AG in March 2015. This acquisition gave L1 Energy its first growth platform in Europe and North Africa.
Building a growth platform in Europe and North Africa
Drawing on its world-class expertise, L1 Energy has been working with DEA to refocus it on its core competencies; to rebalance its portfolio based on value and growth prospects; to optimise its business model for a low oil price market; and to accelerate its growth by making capital available for selective business development.
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.
Moving into a new growth phase - DEA appoints new CEO
In January 2018, Maria Moraeus Hanssen took over as CEO of DEA. Maria was Chief Executive Officer of the French utility group ENGIE's E&P business. She led a strategic transformation of that business, restructuring the portfolio and improving returns and profitability through the pursuit of cultural change, application of new technology, cost reductions and M&A activity.
L1 Energy portfolio
DEA is an international exploration and production company for oil and gas.