HitecVision sells Spring Energy to Tullow Oil plc.
HitecVision is pleased to announce the sale of Spring Energy AS to Tullow Oil plc for a total consideration of USD 372.3 million on a 100% enterprise value basis, which will be adjusted for working capital. In addition to the cash payment on closing there is a deferred contribution of up to USD 300 million, contingent on future well results.
Spring Energy AS is an oil and gas company established in October 2007 by a group of Exploration & Production professionals with extensive experience from the Norwegian Continental Shelf (NCS). The Company participates in exploration, appraisal and development projects and has built a significant portfolio of attractive licenses on the NCS.
Hitecvision’s initial investment was made in May 2008, with a number of subsequent add-on investments to fund the company’s growth. HitecVision capitalized on the substantial in-house experience from the successful investments in the E&P companies Revus (IPO and exit in 2005) and Noreco (IPO in 2007, exited in 2008/2009).
Spring Energy has been through five years of rapid growth and impressive results. The company was pre-qualified as a licence partner on the NCS by the Norwegian authorities in July 2008 and as an operator in May 2009. It has built an attractive portfolio of licenses on the NCS. This has been achieved through a balanced strategy where Spring Energy has acquired acreage through transactions in the asset market and through license awards after successful applications in the license rounds. To execute the exploration strategy HitecVision has been active in securing the needed equity and bank funding for Spring with an exploration loan facility of NOK 2 billion from a syndicate of international banks. The company has achieved a strong exploration track record with 6 commercial discoveries from 12 wells since start-up in 2008 (3 technical discoveries) and with 16 wells planned for the next 24 months
The transaction with Tullow Oil plc is an all cash transaction valued at USD 372.3 million on a 100% enterprise value basis. In addition, a contingent payment element has also been agreed that is linked to future exploration success amounting up to USD 300 million. The contingent payment will be tied to four specific prospects in the drill-queue and will be paid on a sliding scale up to a maximum of USD 150 million per prospect and USD 300 million in aggregate.