Mergers and Acquisitions

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Saipem signs agreement with KCA Deutag for the sale of the Drilling Onshore business

• Total consideration consisting of $550m in cash plus 10% equity stake in the combined entity

• The agreement is consistent with Saipem’s strategy around building a more resilient and focused business model, supporting its capital structure and liquidity objectives

San Donato Milanese (Italy), June 1, 2022 – Saipem S.p.A. ("Saipem") announced today that it has signed a binding agreement with KCA Deutag (“KCAD”) to sell the entirety of its Drilling Onshore operations in exchange for a cash consideration of $550 million plus 10% stake in KCAD after its acquisition of the Saipem’s Drilling Onshore.

The transaction does not entail any financial debt transfer from Saipem to KCAD.

Saipem operates its Drilling Onshore business globally outside Italy, with a focus in the Middle East and Americas, in 13 countries with around 4,000 people and with a portfolio of 83 proprietary land rigs.

Saipem’s Drilling Onshore business posted full year 2021 revenues of 347 million euro and adjusted EBITDA of 82 million euro; adjusted EBITDA of Drilling Onshore is expected to represent around 20% of the full year 2022 consolidated adjusted EBITDA of Saipem.

KCA Deutag is a leading drilling, engineering and technology company working onshore and offshore. It operates approximately 110 drilling rigs in 20 countries, employing 8,300 people. In full year 2021 KCAD posted consolidated revenues of 1,196 million USD and adjusted EBITDA of 237 million USD. Consolidated Net Debt at the year-end 2021 was 396 million USD.

The addition of Saipem’s Drilling Onshore activities to KCAD, which is already among the most reputable international drilling operators, will bring additional opportunities of value creation from operational synergies and inclusion of Saipem expertise from which Saipem in turn expects to benefit via its minority stake in the enhanced entity.

Moreover, the transaction for Saipem is a further step towards a more focused and resilient business model based on the growing trends of Saipem’s reference markets, concentrating efforts in the Drilling Offshore while supporting the achievement of its capital structure and liquidity objectives.

The cash proceeds from the transaction will improve Saipem’s liquidity, lowering its net debt and supporting the delivery of its 2022-25 business plan.

Final consideration is subject to customary closing adjustments.

Closing of the transaction - subject to the completion of the carve out of the Drilling Onshore business from Saipem Group and the completion of Saipem’s capital increase and customary conditions and approvals - is expected to occur by October 31, 2022 for the activities in Middle East and by March 31, 2023 for Americas.

In the context of the transaction, Saipem is being advised by J.P. Morgan and Lazard.

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Merger between Aker BP and Lundin Energy’s E&P business completed

Published:
30.06.2022

Lundin Energy’s E&P business was transferred to Aker BP on 30 June. “Our ambition is to create the world’s best oil and gas company with low costs, low emissions, profitable growth and attractive dividends. We will also play an important role in the global energy transition,” says Aker BP CEO, Karl Johnny Hersvik.

The merged company is the second largest operating company on the Norwegian continental shelf (NCS). The company has a substantial resource base which provides a very good foundation for further growth and leads the way in terms of both low costs and low emissions per barrel.

“In 2016, Aker ASA worked in tandem with bp to merge Det Norske and BP Norge into Aker BP. The ambition back then was to create the leading exploration and production company offshore. Now we’re taking another big step, in cooperation with the Lundin family. Together, we will work to develop Aker BP into the oil and gas company of the future. We will lead the way when it comes to low costs, low carbon, profitable growth and attractive dividends. We will also take the lead to bring about fundamental improvements, such as through digitalisation,” says chair of Aker BP’s board, Øyvind Eriksen.

The best team

Aker BP is uniquely positioned for profitable growth. The company will operate or participate as a partner in most of the major field developments on the NCS in the next few years, with NOAKA, a new central platform on Valhall, the King Lear tie-back to Valhall, Wisting and Skarv satellites as the largest projects. Overall, Aker BP plans to invest more than NOK 150 billion in development projects in the period up to 2030. During the same period, the company will drill around 180 new wells and carry out an exciting exploration programme. All this will contribute to significant production growth in the years ahead.

“The leading company needs to have the leading team. With the merger of Aker BP and Lundin, I’m confident that we have the best team on the Norwegian shelf. But we’re going to need even more people to join in and help us create the E&P company of the future,” says Karl Johnny Hersvik.

Will give more back to society

The development projects, the exploration activity and operation of our six production hubs create significant positive ripple effects for the supplier industry, along with tens of thousands of jobs with highly competent companies across the country.

“These are the same companies that will further develop the knowledge and expertise needed to deliver on renewable projects,” says Hersvik.

He points out that the energy transition is the largest and most important strategic challenge the industry has ever faced.

“The world needs more energy which is sustainable, affordable and reliable. Aker BP is already today among the oil and gas companies in the world with the lowest CO2 intensity. We are progressing according to plan to achieve our targets to reduce our emissions by 50 percent by 2030, and plan to neutralise the remaining emissions,” says Hersvik.

“In addition to reducing emissions, the oil and gas resources must be managed in a way that gives even more back to society,” he adds.

That’s why Aker BP has made a strong commitment to a wide range of digitalisation measures aimed at increasing productivity. At the same time, the company is working closely with its alliance partners to maximise value creation and reduce emissions. The company wants to lead the way in transforming the oil and gas industry.

“We want the industry to work together more closely, and to share more. We intend to build the foundation for new industries to emerge. We will reduce emissions from our activities. And we will bolster the profitability. Increased value creation gives the State and our owners capital that could be invested in new business and industry,” says Hersvik.

Integration in three phases

The initial announcement of Aker BP’s acquisition of Lundin Energy’s E&P business was made on 21 December 2021.

The merger will be implemented in three stages:

• From 1 July this year, Lundin Energy Norway AS will operate as a fully owned subsidiary of Aker BP ASA. The subsidiary’s name is changed to ABP Norway AS.

• From 1 October, all employees will be fully integrated into a single organization

• ABP Norway AS will then, according to the plan, be merged with Aker BP ASA as soon as it is practically feasible.

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Schlumberger, Aker Solutions and Subsea 7 Create Joint Venture



Complementary geographic coverage, technology and engineering capabilities will deliver leading performance and integration in a growing offshore market

HOUSTON, August 30, 2022—Schlumberger, Aker Solutions and Subsea 7 today announced an agreement to form a joint venture to drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time. The agreement will bring together a portfolio of innovative technologies such as subsea gas compression, all-electric subsea production systems and other electrification capabilities that help customers meet their decarbonization goals.

The proposed joint venture will combine Schlumberger’s and Aker Solutions’ subsea businesses, which include deep reservoir domain and engineering design expertise, an extensive field-proven subsea production and processing technology portfolio, world-class manufacturing scale and capabilities, and a comprehensive suite of life-of-field solutions for customers all over the world. Subsea 7 will be an equity partner in the new joint venture.

“As investment in the offshore market—particularly in deepwater—continues to increase, our customers will benefit from enhanced services that leverage digital and technological innovation to drive improved subsea asset performance while increasing energy efficiency and reducing CO2 emissions,” said Schlumberger Chief Executive Officer Olivier Le Peuch. “We look forward to collaborating with both Aker Solutions and our subsea integration partner Subsea 7 on this new venture.”

“Aker Solutions, Schlumberger and Subsea 7 are complementary businesses, both in terms of products and services, as well as customers and geographical presence. Furthermore, Schlumberger shares our commitment to innovation, such as deploying digital solutions and decarbonization technologies,” said Øyvind Eriksen, President and Chief Executive Officer of Aker ASA.

Upon closing of the proposed transaction, the existing Subsea Integration Alliance (SIA) between Schlumberger and Subsea 7, will be amended so that the new joint venture will assume Schlumberger’s role in the Alliance, which will be renewed for a ten-year term.

“We are excited to build on our highly successful alliance with Schlumberger and partnership with Aker Solutions. This new joint venture is a critical step as we collaborate on integrated subsea projects that drive maximum value for our customers,” said Subsea 7 Chief Executive Officer John Evans.

In addition to contributing its subsea business to the joint venture, at closing Schlumberger will issue to Aker Solutions shares of Schlumberger common stock valued at USD 306.5 million in a private placement. Concurrently, Subsea 7 will purchase its 10% interest in exchange for USD 306.5 million in cash to Aker Solutions. The joint venture also will issue a promissory note to Aker Solutions for USD 87.5 million. At closing of the joint venture, Schlumberger will own 70%, with Aker Solutions owning 20% and Subsea 7 owning 10%. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the second half of 2023.

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04 July 2022

Completion of Acquisition of Siccar Point Energy

Ithaca Energy is pleased to announce that its acquisition of Siccar Point Energy, announced on 7 April 2022, has completed with all conditions having been met. The acquisition positions Ithaca as one of the leading E&P operators in the UK North Sea with four of the basin’s largest producing fields and some of its largest development projects.

Gilad Myerson, Executive Chairman of Ithaca Energy, commented:

“Completion of the acquisition of Siccar Point marks a key milestone in establishing Ithaca as a leading UK North Sea E&P company with significant production, material growth potential, and a long-life cycle portfolio. We are excited about the future and welcome our new colleagues from Siccar Point.”

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Seadrill Limited Announces Agreement to Acquire Aquadrill LLC in All-Stock Transaction

Hamilton, Bermuda, December 22, 2022 – Seadrill Limited (NYSE & OSE: SDRL) (“Seadrill”) and Aquadrill LLC (“Aquadrill”; and together with Seadrill, the “Company”) today announced that they have entered into a definitive merger agreement under which Seadrill will acquire Aquadrill in an all-stock transaction. Upon completion of the transaction Seadrill shareholders and Aquadrill unitholders will own 62% and 38%, respectively, of the outstanding common shares in the Company. The transaction values Aquadrill at an implied equity value of approximately US$958 million, based on Seadrill’s 30-day volume-weighted average share price on the NYSE of US$31.25 as of 22 December 2022.

The combination creates an industry-leading offshore drilling company, with a modern and high specification fleet and a streamlined cost structure. The Company will be well-placed to realize estimated annual run rate synergies of at least US$70 million. The Company will also be well-positioned for further growth given its stronger credit and liquidity profile, and to provide attractive cash flows.

Commenting on the transaction, Simon Johnson, Seadrill’s President and Chief Executive Officer, said, “At Seadrill we seek to deliver safe and effective operations as the bedrock for generating returns for our shareholders. Seadrill and Aquadrill have a long and rich strategic and operational management history. Our shared heritage will promote efficient integration of the two companies. I look forward to welcoming the Aquadrill fleet back into the Seadrill family.” Steven Newman, Aquadrill’s Chief Executive Officer, said, “We believe this combination will create the most value for our shareholders and will create an excellent platform for high quality service delivery to our customers.”

The transaction has been approved by the Boards of Directors of both Seadrill and Aquadrill. The required approval of Aquadrill’s unitholders has also been obtained. The transaction does not require Seadrill shareholder approval.

Strategic Rationale

The combination of Seadrill and Aquadrill presents a compelling strategic rationale for all stakeholders:

• Creation of a leading offshore driller with best-in-class fleet: The Company will be in a strong position to serve a broader range of customers, with one of the youngest and most technologically advanced fleets in the industry, and a combined backlog of US$2.8 billion. The Company will own 12 floaters (including seven 7th generation drillships), three harsh environment rigs, four benign jack-ups, and three tender-assisted rigs. Additionally, seven rigs will be managed under a variety of strategic partnerships.

• Increased exposure and upside to the improving market: The Company will have a diversified portfolio of contract coverage, with additional active fleet capacity to deploy in a rising market environment across critical basins in the Golden Triangle.

• Significant synergy potential: The Company will be uniquely positioned to rapidly integrate and realize identified and achievable synergies of at least US$70 million annually on a run-rate basis. All synergies are expected to be fully realized within two years of closing the transaction. Synergies are expected to be generated through a combination of:
  • management fee optimization;
  • G&A and overhead cost savings;
  • logistics, supply chain and inventory efficiencies; and
  • capital expenditure savings.

• Strong cash flow generation and further strengthened balance sheet: The Company should benefit from an enhanced cash flow profile and a strengthened balance sheet, with significant credit and liquidity improvement, and with access to a potentially lower cost of capital.
  Transaction Overview

Aquadrill unitholders and equity award holders will in aggregate receive 30,645,160 common shares of Seadrill, representing 38% ownership in the Company, or approximately 36.6% on a fully-diluted basis. Following completion of the transaction, Aquadrill will become a wholly owned subsidiary of Seadrill.

Certain of Aquadrill’s unitholders, which collectively own more than 75% of Aquadrill’s common units, have agreed to approve the transaction. No further vote of Aquadrill unitholders is required in respect to the transaction. The transaction does not require Seadrill shareholder approval. The transaction is, however, subject to applicable regulatory approvals and other customary conditions, and is expected to close in mid 2023.

Governance and Leadership

The Company will remain named Seadrill Limited and will continue to be domiciled in Hamilton, Bermuda. Julie Robertson and Simon Johnson will continue in their respective roles as Chair of the Board of Directors, and President and Chief Executive Officer.

Company Pro Forma Financial Information

As of November 30, 2022, Seadrill and Aquadrill had a combined cash balance of approximately US$628 million, including approximately US$133 million of restricted cash, and a combined debt balance of approximately US$521 million.

Other

Seadrill is currently traded on the New York Stock Exchange and the main list of the Oslo Stock Exchange.

Advisors

Citi is serving as sole financial advisor and Baker Botts L.L.P. and Advokatfirmaet Thommessen AS are serving as legal counsel to Seadrill. Intrepid Partners, LLC is serving as sole financial advisor and Akin Gump Strauss Hauer & Feld LLP and Advokatfirmaet Schjødt AS are serving as legal counsel to Aquadrill.

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OUTCOME OF THE EXTRAORDINARY GENERAL MEETING HELD BY SEMBCORP MARINE SHAREHOLDERS ON 16 FEBRUARY 2023

Singapore, 16 February 2023 – Sembcorp Marine Ltd (the “Company”) wishes to announce that the proposed ordinary resolution set out in the notice of the Extraordinary General Meeting (“EGM”) dated 31 January 2023 was duly approved and passed by 95% of the Company’s shareholders at the EGM held on 16 February 2023.

The resolution called for Sembcorp Marine shareholders to approve acquisition plan for Keppel Offshore & Marine businesses for a better synergy going forward.

T S Tay Public Accounting Corporation was appointed as the scrutineer for the EGM.

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Equinor acquires Suncor Energy UK

03 MARCH 2023

Equinor UK Limited has signed an agreement to acquire Suncor Energy UK Limited for a total consideration of USD 850 million.

The transaction includes a non-operated interest in the producing Buzzard oil field (29.89%), an additional operated interest in the Rosebank development (40%) and Suncor employees based in the UK who work with these assets.



“This transaction is in line with Equinor’s strategy of optimizing our oil & gas portfolio and deepening in our core countries. We are building on our longstanding position as a broad energy partner to the UK, strengthening our position as a reliable energy provider in Europe, while continuing to deliveron our ambition of becoming a net-zero company,” said Philippe Mathieu, executive vice president for Exploration and Production International.

Equinor has been a reliable, broad energy partner to the UK for almost 40 years, developing domestic energy resources, generating low-carbon electricity, and supplying the equivalent of 29% of the UK’s total natural gas demand in 2022. Equinor is looking to further support the UK economy by investing billions in crucial energy infrastructure, including offshore wind, carbon capture and storage (CCS), hydrogen, power, and oil and gas.

The transaction will add approximately 15,000 barrels of oil equivalent per day in equity share in 2023 and create synergies with Equinor’s existing operations.

The transaction will increase Equinor’s operated share of the Rosebank development with an additional 40%. Rosebank is being developed in line with the UK Government North Sea Transition deal and the Rosebank partners are targeting a final investment decision in 2023, subject to the UK Government’s and partners’ approval. USD 250 million of the consideration is contingent upon a final investment decision for Rosebank.

The transaction is subject to relevant regulatory approvals.

The Buzzard field

• Consists of four fixed platforms and three subsea manifolds.

• The field is currently producing at approximately 60,000 barrels of oil equivalents per day.

• Liquids are exported via the Forties Pipeline System to Hound Point Terminal where the crude is lifted and sold in the open market.

• The gas volumes are exported via the FUKA system.

• There is an electrification initiative to reduce the CO2 emissions on Buzzard.

• Buzzard is operated by CNOOC International.

The Rosebank development

• The Rosebank field, operated by Equinor is an oil and gas field located about 130km west of the Shetland Islands on the UK continental shelf.

• The Rosebank development has been optimized to reduce carbon emissions and the FPSO will be prepared for future electrification in line with the North Sea Transition Deal.

• The expected recoverable resources are approximately 300 million barrels of oil.

• Production from the field will be through subsea wells tied back to a redeployed FPSO for processing and offloading at the Rosebank field.

• The Rosebank partners: Equinor (40%), Suncor Energy (40%)* and Ithaca Energy (20%).

*To be acquired by Equinor, subject to relevant regulatory approvals.