Eni Norge and Hitec To Merge

Italy's Eni and leading Stavanger-based private equity investor HitecVision announced July 2 that Eni Norge is to merge with Point Resources, with the company to be renamed Var Energi. Neither company mentioned any cash payment as part of the transaction. 

Eni Norge/Point Resources will produce some 180,000 barrels of oil equivalent (boe) in 2018 from a portfolio of 17 producing oil and gas fields, and have reserves/resources exceeding 1.25bn boe, said Eni. 

Production is expected to reach 250,000 boe/d by 2023 after developing more than 500 Mboe in ten existing assets with a breakeven price of less than $30/b, Eni added, with Var Energi planning to invest  more than kroner 65bn ($8bn) over the next five years to bring projects on stream, revitalise older fields, and explore for new resources. "The extended presence in the Norwegian waters will allow the company also to expand further its portfolio through both future exploration bid rounds and M&A transactions," said Eni.

This latest deal has parallels with the creation of Aker BP in 2016 as a leading Norwegian independent, and Total's takeover of Maersk Oil in order to bolster its presence in the Danish North Sea. At the same time, Wintershall and DEA's owners are in talks to conclude a similar upstream merger, which would be BASF-Wintershall-controlled.

Eni CEO Claudio Descalzi said: "This is a fundamental step ahead in our strategy to reinforce Eni's presence in OECD countries with further upstream potential, such as Norway. The high quality of the human capital as well as of the assets in the portfolio, together with the expansion opportunities still available in Norway, will create a significant upside value to the shareholders of the merged company. Eni will bring into Var Energi its globally recognized capacity to innovate and its best technology, which has enabled us to achieve remarkable results in recent years, through great discoveries and the start-up of these discoveries in a record time"

Ole Ertvaag, CEO and founding partner of HitecVision commented: "We are proud to bring together two E&P organizations that each have a history in Norway going back to the very beginning of our oil and gas industry, with license no. 001 from 1967 and participation from the start in Ekofisk, the first oil field in Norway. After more than fifty years Norway still has very significant oil and gas resources, and the combination of Eni and Point builds on decades of experience to create an all-new company for the decades ahead."

Point Resources has come a long way in a short time since acquiring ExxonMobil's operated business in Norway last year, added Point's CEO Morten Mauritzen. V 

Kristin F. Kragseth, currently vice president for production at Point Resources, will become CEO of the combined entity, while Eni Norge chief Philip Hemmens will be its new chairman. Var Energi will be 69.6%-owned by Eni, 30.4% by HitecVision, with both having agreed a core strategy for the new firm. Completion is expected by end-2018. 

Eni Norge struggled to control problems at its Barents Sea oilfield Goliat during 2016-17; the appointment of Hemmens is understood to have ironed out several of these.