DNO buys Sval Energi for $450m in cash

Norwegian oil and gas player DNO has reached an agreement to acquire all of the shares of Sval Energi from private equity firm HitecVision for a cash consideration of $450m.

DNO said in an Oslo Bors filing that the value of the firm is based on an enterprise value of $1.6bn. The acquisition will be financed from existing liquidity including available credit facilities. In yearend 2024, the company held $900m in cash and a further $100m liquidity under its reserve-based lending facility.

Additional funding sources include new bonds and RBL debt as well as offtake-based financing. The effective date of the transaction is January 1, 2025, with expected completion mid-year 2025. Previous news reports showed that HitecVision was planning to sell Sval Energi since January last year.

According to the Norwegian firm, Sval Energi’s assets are complementary to DNO’s North Sea portfolio and will boost the company’s global net production by two-thirds to around 140,000 boepd. Proven and probable (2P) reserves will also increase by 50% to 423m boe.

North Sea production and reserves will also increase. The former will quadruple to around 80,000 boepd while the latter will skyrocket from 48m boe to 189m boe (2P) and from 144m boe to 246m boe (2C).

“Given low unit production costs and limited near-term investment requirements, the Sval Energi portfolio is highly cash generative and will help underpin the development of the numerous discoveries we have made in Norway recently,” said DNO’s executive chairman Bijan Mossavar-Rahmani.

This transaction will also strengthen DNO’s presence in core areas on the NCS where the company already has 14 discoveries.

Sval Energi will bring with it non-operated interest in 16 producing fields offshore Norway, 141m boe in net 2P reserves and 102m boe of net 2C resources as well as a team of 93 employees to be integrated into the DNO organization. Its cash flow from operations totalled $565m in 2024 with a production cost of just $14 per boe.

The MLK wind farm will be the only asset carved out before closing and is not considered part of the transaction.