BW Offshore to divest stake in BW Energy for $176m

22 January 2024

Listed on the Oslo Stock Exchange, BW Energy has upstream assets in Gabon, Brazil, and Namibia

BW Offshore, a provider of floating production solutions, has agreed to divest its entire stake of 22.52% in offshore exploration and production (E&P) company BW Energy to BW Group for NOK1.86bn ($176m).

As part of the deal, BW Group will sell 58.1 million shares in BW Energy at NOK32 ($3.05) per share. BW Energy, which is based in Norway, is listed on the Oslo Stock Exchange.

The assets of BW Energy include the Dussafu Marine license in Gabon, the Kudu field in Namibia, and the Golfinho and Camarupim fields in Brazil among others. (Credit: 466654 from Pixabay)

BW Offshore said that the decision was made by its independent directors following a comprehensive review of the company’s strategy and consideration of various factors, including external valuation advice. The company had previously stated that its stake in BW Energy is not viewed as a long-term strategic investment.

BW Offshore CEO Marco Beenen said: “We are pleased to have obtained a price for BW Energy that is close to the highest that the shares have historically traded, which became possible following the outcome of BW Group’s mandatory offer resulting in BW Group holding approximately 52% of BW Energy.

“This transaction strengthens our balance sheet and allows the continuation of a sustainable dividend that can potentially grow over time.”

BW Energy is engaged in targeting proven offshore oil and gas reservoirs by implementing low-risk phased developments.

The company leverages existing production facilities to enable quicker initiation of oil production and cash flow while requiring lower capital investments compared to conventional offshore projects.

BW Energy holds a 73.5% stake in the Dussafu Marine license offshore Gabon. In Brazil, the company fully owns the Golfinho and Camarupim fields, has a 76.5% stake in the BM-ES-23 block, and a 95% stake in the Maromba field.

In Namibia, the company has a 95% stake in the Kudu field.

Upon purchasing the additional shares in BW Energy, BW Group's stake in the latter will grow from 51.86% to around 74.38%.

BW Group chairman Andreas Sohmen-Pao said: “Under BW Offshore’s current dividend policy, it would have taken over seven years to distribute BW Offshore’s stake in BW Energy. 

“This transaction clears a significant overhang on BW Energy shares, and we look forward to continued efforts to build the company and unlock shareholder value."

The deal is anticipated to close later this week.

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