DONG Energy divests upstream oil and gas business to INEOS
Wednesday, May 24, 2017
DONG Energy has agreed to divest the entire share capital of DONG E&P A/S to INEOS for an unconditional payment of USD 1,050 million (DKK 7.0 billion) on a cash and debt free basis, a contingent payment of USD 150 million (DKK 1.0 billion) related to the Fredericia stabilisation plant and a contingent payment of up to USD 100 million (DKK 0.7 billion) subject to the development of the Rosebank field.

INEOS will, by acquiring DONG E&P A/S, take over decommissioning liabilities of approximately DKK 7.0 billion. DONG Energy will retain all cash flows until 30 June 2017 (free cash flow was DKK 2.1 billion in Q1, 2017) and retain all hedge contracts related to the Oil & Gas business (market value was DKK 1.9 billion as at 31 March 2017).

Henrik Poulsen, CEO of DONG Energy, said:
“Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business. With the agreement with INEOS we’ve obtained just that.”

“The transaction completes the transformation of DONG Energy into a leading, pure play renewables company,” Henrik Poulsen concluded.

The transaction is expected to result in a gain on sale of enterprises of approximately DKK 2.5 billion including the contingent payment related to the Fredericia stabilisation plant. The gain will be presented as part of net profit from discontinued operations in DONG Energy's financial statements after closing.

Of the USD 1,050 million unconditional consideration, USD 250 million (DKK 1.7 billion) will be payable from 2018 to 2020.

Closing of the transaction is subject to regulatory and certain other third party approvals and is expected to take place in the third quarter of 2017.

At closing of the transaction, approximately 440 employees working for DONG Energy Oil & Gas will transfer to employment with the INEOS group.

J.P. Morgan acted as exclusive financial adviser to DONG Energy in connection with the transaction.

The information provided in this announcement does not change DONG Energy's previously announced outlook for the 2017 financial year as Oil & Gas is presented as an asset held for sale and discontinued operations.

For more information, please visit: http://www.dongenergy.com
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