Money

Total says Maersk Oil $3 bln decommissioning liabilities taken into account

Total says Maersk Oil $3 bln decommissioning liabilities taken into account”

The Maersk assets will boost the French giant's business in the North Sea, adding to deals earlier this year that expanded its presence in Uganda and Brazil.

Maersk Oil's assets will bolster Total's production by 160,000 barrels a day of oil equivalent in 2018 and add significantly to the French company's portfolio of oil-and-gas reserves, an important signal of growth for investors.

Although Danish company Maersk Oil is now in foreign hands, the company will continue to have a strong connection to Denmark, reveals Maersk Group in a press release.

Today's acquisition is thought to be the biggest oil deal by Total since, under its old name of TotalFina, it acquired Elf Aquitaine, its French rival, for £33.7bn in 2000.

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Today, A.P. Møller - Mærsk A/S (APMM) has entered into an agreement to sell Mærsk Olie og Gas A/S ("Maersk Oil") to Total S.A. for Dollars 7.45bn in a combined share and debt transaction. Total said the production it is buying from Maersk can generate free cash flow at less than $30 a barrel. It said it will uphold Maersk Oil's development schedules and investments in a series of projects, and that Denmark will become the regional hub for all its operations in Denmark, Norway and the Netherlands. "We intend to build on the strong operational and technical competencies of the Maersk Oil teams in the same way we managed to do it in Belgium with the teams of Petrofina in the refining & chemical businesses". Total announced on July 27 a first-half net income of $4.8 billion, up from $3.7 billion in the same period previous year. "The number of well abandonment campaigns in the North Sea is steadily increasing and we're thrilled to have achieved this contract for a key abandonment operation".

"This transaction delivers an exceptional opportunity for Total to acquire, via an equity transaction, a company with high-quality assets which are an excellent fit with many of Total's core regions", chief executive Patrick Pouyanne said in a statement.

At closing of the transaction, in order that Totals shareholders benefit from the accretive impact of the acquisition of Maersk Oil on earnings and cash flow, the Board of Directors of Total will consider removing the discount offered on the scrip dividend. Total gains access to the Johan Sverdrup discovery (8.44%) and the UK's largest gas development, Culzean (49.99%).



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