BW Offshore: Targeting Q1 2020 IPO of BW Energy as an independent E&P company
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Targeting Q1 2020 IPO of BW Energy as an independent E&P company
BW Offshore Limited ("BW Offshore" or "BWO") is pleased to provide the following update regarding its 68.6% owned exploration and production (E&P) subsidiary BW Energy Limited ("BW Energy" or the "Company").
- BW Energy plans Initial Public Offering (IPO) and listing following strong growth and value creation in 2019
- IPO and listing planned through a combination of a distribution of shares from BW Offshore and a contemplated equity raise of about USD 175 million
- New investors will be invited to subscribe for new shares at a valuation of USD 700-800 million for the current outstanding share capital of BW Energy
- The target for the first day of trading on the Oslo Stock Exchange is within Q1 2020
- Strong operational performance on Dussafu in 2019, with an average production of 11,779 bbl/day (gross), field uptime of 98% and average OPEX of USD 21.7/bbl (excluding royalty)
- Financial position of USD 39.6 million net cash as of 31 December 2019 and no external interest-bearing debt
- In process of finalising a USD 200 million RBL facility for Dussafu with expected closing in Q1 2020
“Throughout 2019, we exceeded operational and financial targets at Dussafu. Successful in-field exploration significantly increased our reserves base and led to an acceleration of future production growth. In Brazil, we acquired the Maromba license and submitted a field development plan. At Maromba, we will deploy the same development approach utilising an existing FPSO, which has made Dussafu a world-class asset,” said Carl Krogh Arnet, the CEO of BW Energy. “Our development plans for Dussafu and Maromba are expected to deliver a 5-fold increase in production to more than 50,000 bbl/day net by 2023 when we reach first oil from Maromba. This is profitable growth, from proven reservoirs, with highly attractive economics that will yield substantial cash flow and dividend potential to our shareholders in the years ahead.”
BW Energy is a fast-growing E&P company with a differentiated strategy targeting proven offshore oil and gas reservoirs through phased developments by utilising existing FPSOs to reduce time to first oil and cash-flow with lower investments than traditional offshore developments. Currently, the two main assets of the Company are the producing Dussafu Marine Permit offshore Gabon (73.5% working interest) and the Maromba field development in Brazil (95% interest post optional farm-out) which are both operated by the Company. Total net 2P reserves + 2C resources are 247 million barrels per Netherland, Sewell & Associates, Inc., (NSAI) reports.
“BW Energy has matured into a full cycle E&P company with competencies covering the full scope of offshore field developments and a clear path to future production growth and value creation,” said Andreas Sohmen-Pao, Chairman of the Board of BW Energy. “The disciplined, low-risk strategy enables efficient field developments, both in terms of cost and time to first oil, as well as in terms of our environmental footprint, by addressing already proven reserves and redeployment of existing production units.”
Effective from the day of listing, the Board of Directors of BW Energy will consist of; Andreas Sohmen-Pao (BW Group Limited), Marco Beenen (CEO of BW Offshore), Hilde Drønen (independent), Russell Scheirman (independent) and Tormod Vold (independent).
IPO to fund production growth
Following the growth and maturation of the Company, the current owners and the Board of Directors have decided to proceed with the previously communicated plan to list the Company.
The listing is intended to be executed through a combination of i) an IPO of new shares in the Company raising gross proceeds of about USD 175 million and ii) distribution of existing shares in the Company held by BW Offshore to its shareholders. DNB Markets and Pareto Securities have been retained as Joint Global Coordinators and Bookrunners (the "Joint Global Coordinators" or the "Managers") for the contemplated IPO placement and listing. Arctic Securities, Danske Bank, Nordea Bank and Swedbank in cooperation with Kepler Cheuvreux are engaged as co-managers. Advokatfirmaet Thommessen AS is acting as legal advisor to the Company and Advokatfirmaet Schjødt AS is acting as legal advisor to the Managers.
The net proceeds from the IPO will strengthen the Company’s financial position and fund the development of the Maromba field as well as future growth opportunities. Based on initial feedback obtained by the Joint Global Coordinators, the Company and its current shareholders expect to execute the IPO at a pre-money valuation of current outstanding share capital in the range of USD 700-800 million.
The Company intends to satisfy the free float requirement for listing on the Oslo Stock Exchange through a combination of the IPO and a distribution of BW Energy shares from BW Offshore to its shareholders. It is estimated that the distribution will be of about USD 100 million. The final amount of BW Energy shares to be distributed to the BW Offshore shareholders will be determined when the price and size of the IPO are finally determined following completion of the IPO book-building period. BW Energy shares distributed are expected to be tradable for BW Offshore shareholders on the first day of listing for BW Energy on the Oslo Stock Exchange. BW Offshore has currently approximately 3,850 shareholders which, coupled with the contemplated IPO placement, add significant liquidity and distribution of shares in the Company after the IPO.
Continued strong operational performance on Dussafu, progressing Maromba towards development
As operator of the Dussafu block offshore Gabon, BW Energy delivered strong operational performance through 2019. Production from the Tortue field was 4.3 million barrels in 2019 (gross, equivalent to 11,779 bbl/day), above earlier guidance. For 2020, the Company expects production of 6.3 – 7.9 million barrels (equivalent to 17,300 - 21,600 bbl/day, gross) from Tortue as Phase 2 is planned to come on stream during Q1 and Q2 2020.
Following the announced Hibiscus discovery in August 2019, BW Energy has updated the previously sanctioned development of the Ruche area. A larger jacket with 12 well slots will be installed closer to Hibiscus and will produce 70 million barrels of gross certified reserves. The initial six wells will develop 37 million barrels in the Hibiscus and Ruche structures and the subsequent wells will develop an additional 33 million barrels from Hibiscus, Ruche and Ruche NE structures. The total gross capex for the greater Ruche development area (Phase 1 and 2) is USD 660 million, decreasing the unit capex from USD 13 to USD 9 per barrel.
In March 2019, BW Energy announced the acquisition of the Maromba license from Petrobras and Chevron in Brazil. Maromba is a well delineated field with 2C contingent resources in excess of 100 million barrels as certified by NSAI. BW Energy delivered a field development plan to Brazilian regulator ANP in December 2019 based on subsea wells tied back to an FPSO. Initial development will target 55 million gross barrels from the 3 first wells and an incremental 44 million gross barrels from a further 3 producers and with support from 2 water injectors in the second phase. BW Energy is targeting first oil from Maromba by year-end 2022.
BW Energy financial status per year end 2019
In Q4 2019, two liftings plus domestic market sales were made from the Dussafu license for a total of 1.31 million barrels net of state profit oil. The average realized price was USD 65.2/bbl. As of 31 December 2019, BW Energy has a net cash balance of USD 39.6 million and no interest-bearing debt, adjusting for intercompany debt owed to BW Offshore which will be repaid ahead of the IPO and payables to partners.
The Company is in advanced stages of finalising a USD 200 million Reserved Based Lending (RBL) facility for Dussafu with four banks that is expected to be closed in Q1 2020. The Company is also in the process of increasing this facility by an amount of USD 100 million in the form of an uncommitted accordion.
New stand-alone corporate website
Please visit the new corporate website at www.bwenergy.no for more information.
CFO BW Energy – Knut Sæthre: +47 91 11 78 76
CFO BW Offshore – Ståle Andresen: +65 97 27 86 47
Head of Corporate Finance – Anders S. Platou: +47 99 50 47 40
Manager IR and Communications – Una Holmen: +47 93 60 61 06
About BW Energy
BW Energy is a growth E&P company with a differentiated strategy targeting proven offshore oil and gas reservoirs through low risk phased developments. The Company has access to existing FPSOs to reduce time to first oil and cash-flow with lower investments than traditional offshore developments. The main assets are 73.5% of the producing Dussafu Marine Permit offshore Gabon and a 95% interest in the Maromba field in Brazil, both operated by the Company. Total net 2P+2C reserves are 247 million barrels at the start of 2020 and gross average production from Dussafu was 11,779 bbl/day in 2019.
About BW Offshore
BW Offshore is a leading provider of floating production services to the oil and gas industry. The company also participates in developing proven offshore hydrocarbon reservoirs. BW Offshore is represented in all major oil and gas regions world-wide with a fleet of 15 owned FPSOs. The company has more than 35 years of production track record, having executed 40 FPSO and FSO projects. BW Offshore is listed on the Oslo Stock Exchange.
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