INEOS Energy Acquires Hess Corp.'s Danish Business
INEOS E&P AS, a subsidiary of the INEOS Group, has entered into an agreement with NYSE-listed HESS Corp. to acquire its Danish subsidiary, for a total consideration of US$150 million.
INEOS E&P is now part of INEOS Energy, a group that was formed in December 2020 to combine the existing INEOS Oil & Gas businesses with the extensive development activities that the company has in developing low carbon technologies geared towards energy transition. The transaction represents the first deal to be announced following the formation of INEOS Energy.
Under the terms of the deal, INEOS will acquire 100% of Hess Denmark ApS, which holds a 61.5% operated interest in the South Arne oil field and a 4.8% interest in the Solsort field. INEOS is already a partner in both assets and operates the Solsort field.
The South Arne field (license 7/89) covers an area of approximately 73 sq. km, and is located about 150 mi. west of Esbjerg in a water depth of 60 meters. The field has been producing since 1999 and uses horizontal production and water-injection wells to optimize production from chalk reservoirs. The Solsort field, located in licenses 4/98 and 3/09, covers an area of 20 sq. km and is located approximately 8 km north-east of South Arne. The field was discovered by DONG Energy AS in 2010 and appraised in 2014.
Total proved (1P) reserves attributable to Hess Denmark’s share of assets (as of December 31st, 2020) was estimated at 40 million barrels of oil equivalent (MMboe), 100% of which was proved developed. Production (from South Arne) averaged around 5,800 barrels of oil per day (bbls/d) during Q4-2020.
“This deal represents a major step in reshaping our energy business. HESS was one of the earliest pioneers in developing this basin. This deal will open up future growth prospects that can be developed in Denmark’s offshore oil and gas sector, supported by a very promising carbon storage project helping to deal with future emissions, said Brian Gilvary, Executive Chairman of INEOS Energy.
“The sale of our Denmark asset enables us to further focus our portfolio and strengthen our cash and liquidity position. Proceeds will be used to fund our world class investment opportunity in Guyana,” added John Hess.
As part of the transaction, which is subject to government approval, approximately 60 people will transfer to INEOS on completion (expected during Q3-2021).