Harbour Energy Reaches $11 Billion Deal for Wintershall Dea Assets

A day after Russia's President Vladimir Putin stripped Wintershall DEA and Austria's OMV of their multi-billion-dollar stakes in natural gas joint ventures in the Russian Arctic, the UK's Harbour Energy said it had reached an agreement with BASF and LetterOne to buy almost all of Wintershall Dea's upstream assets for more than $11 billion.

The deal includes Wintershall's upstream assets in Algeria, Argentina, Denmark, Egypt, Germany, Libya, Mexico, and Norway. It also includes Wintershall's carbon dioxide capture and storage licenses in Europe.

What's not on the list of what is included, however, are Wintershall's Russian assets, which Putin said would be transferred to newly set up Russian firms. 

According to Harbour, the deal will make it "one of the world's largest and most geographically diverse independent oil and gas companies."

At the deal's conclusion, BASF—a majority shareholder in Wintershall Dea, will own 46.5% of Harbour Energy. BASF will also be able to nominate two non-executive directors to Wintershall's board.

OMV, BASF, LetterOne, and Wintershall Dea all held minority stakes in the Yuzhno-Russkoye field in the Russian Arctic, but Putin said earlier this week that all corporate agreements that have been in force so far are no longer valid.

Harbor Energy is trading up 22.38% as of 10:17 a.m. ET after the deal was announced.

Not even a month ago, Harbour Energy said it was evaluating "a number of material" merger and acquisition opportunities as it eyed becoming a global company. "Recent large transactions in our sector and our own discussions with potential counterparties indicate that market conditions for M&A are improving," Harbour's Chief Executive Linda Cook said in a statement near the end of November. "We remain disciplined, balancing the return of excess capital to shareholders with ensuring flexibility for meaningful, value accretive M&A which would support shareholder returns over the longer run."

By Julianne Geiger for Oilprice.com

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