Hess subsidiary Hess Norge has signed an agreement with Aker BP to divest interests in the Valhall and Hod fields located in southern Norwegian North Sea, for $2bn.
The firm owns 64.05% interest in Valhall field as well as 62.5% stake in Hod field. The two fields jointly produced an average of 26,000 barrels of oil equivalent per day net during first six months of 2017 to Hess.
Hess said that the divestment is part of its strategy to focus on higher return assets while selling more mature, higher cost assets.
Hess CEO John said: “Proceeds from these asset sales, along with cash on the balance sheet, will prefund development of our world class investment opportunity in offshore Guyana, where we have participated in one of the world’s largest oil discoveries of the past decade – positioning our company to deliver more than a decade of cash generative growth and significant value for our shareholders.”
Upon completion of the deal, Aker BP will be the sole owner of the two fields.
Aker BP, which seeks to strengthen its position on the Norwegian Continental Shelf with the new acquisition, intends to divest or swap a minority stake in the two fields.
Aker BP chairman Øyvind Eriksen said: “This investment allows Aker BP to raise the dividend level to $350m per year with first uplift planned for fourth quarter of 2017. Through the equity issue, we are enabling Aker BP to grow further on the Norwegian Continental Shelf.”
Scheduled to be completed by the end of 2017, the transaction is subject to customary conditions for completion including approval by the ministry of oil and energy, ministry of finance and relevant competition clearance.
Additionally, Hess has announced the sale process for its 61.5% interest in the South Arne field in Denmark.
During the first six months of 2017, the South Arne field had an average output of 11,000 barrels of oil equivalent per day net.
Image: The Valhall field located offshore Norway. Photo: courtesy of Aker BP.