Norway's Okea Seeks Cash for Shell Deal

Norwegian producer Okea is looking to raise about NKr 110mn ($13mn) through a private share issue and plans to list the company on the Oslo Stock Exchange within 12 months, it said September 7.

The money will be working capital following its "transformative" Nkr 4.5bn ($535mn) acquisition of supermajor Shell’s 44.56% working interest in the operated Draugen field and 12% interest in the non-operated Gjoa field, giving Okea 20,000 b/d oil output and a revenue stream. The money may also be used for "strategic and structural opportunities, transition costs related to the Shell acquisition and general corporate purposes." 

Okea funded the deal chiefly with a Nkr 1.043bn underwritten equity commitment from the current majority owner Seacrest Capital Group and its strategic Thai co-investor Bangchak Corporation and a $180mn senior secured bond issued in June 2018.

The issue will enable Okea's shareholders to participate in the Shell acquisition at similar terms as the equity commitment, and will also be open to new investors in order to further strengthen Okea’s shareholder base ahead of the intended float.

CEO Erik Haugane said the former Shell assets would put Okea in a strong position to execute on its organic growth strategy and pursue further mergers and acquisitions. Okea "has ambitious targets for increased efficiencies and reduced development costs on the Norwegian Continental Shelf, and is determined to be an active owner and operator, creating value for Okea, its partners and the Norwegian state."

Haugane said that co-founding Aker BP and leading the company through its early-day growth phase had given Okea's management good experience of the public market. He said: "We are certain that a listing will enhance our ability to execute on Okea’s strategy and create value for our shareholders.”

The Shell deal is subject to government approvals with completion expected by the end of the year.