Statoil to increase ownership in Lundin Petroleum through swap agreement

In a deal initiated by Lundin Petroluem, Statoil ASA (OSE:STL, NYSE: STO) agreed to divest its entire 15% interest in the Edvard Grieg field for an increased shareholding in Lundin Petroleum. The transaction also includes divestment of a 9% interest in the Edvard Grieg Oil pipeline and a 6% interest in the Utsira High Gas pipeline, and in addition, payment of a cash consideration of US$68 million to Lundin Petroleum.

Following completion of the transaction Statoil will own approximately 68.4 million shares of Lundin Petroleum, corresponding to 20.1% of the shares and votes. The two companies will continue to operate independently, and act as separate entities in all licenses on the NCS.

"The increased shareholding in Lundin Petroleum will be an important long term industrial investment for Statoil. The transaction also underlines our long term interest and commitment to the future of the NCS," says Hans Jakob Hegge, executive vice president and CFO of Statoil ASA.

In consideration for the acquisition of the assets, Lundin Petroleum has agreed to issue to Statoil 27,580,806 shares in Lundin Petroleum based upon an agreed average share price of SEK 138 per share and a SEK/USD exchange rate of 8.09. In addition, Lundin Petroleum will transfer 2,000,000 treasury shares and issue an additional 1,735,309 shares to Statoil in exchange for a cash consideration based on the market value of the shares (ten-day volume weighted average closing share price prior to and including the date of signing).

As a consequence of the transaction Statoil will equity account its stake in Lundin Petroleum, resulting in an increase in Statoil's reserves and production. Statoil has no plan to further increase its shareholding in Lundin Petroleum.

The transaction is subject to approval in Lundin Petroleum AB's Extraordinary General Meeting and required authority approvals. The transaction has received unanimous support by the Lundin Petroleum Board of Directors, and the Lundin Petroleum family entities have confirmed that they will vote in favor of the transaction at the EGM.

Closing of the transaction is expected by end of July 2016. The effective date of the divestments is January 1, 2016.

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