Lundin Energy explores potential US$10 billion sale
Nordic oil producer Lundin Energy AB is exploring a potential sale which could rank as one of the largest European oil and gas deals in years, people with knowledge of the matter said.
The Swedish company is working with an adviser to study strategic alternatives, the people said, asking not to be identified because the information is private.
Shares of Lundin Energy gained as much as 14% on the 29th November, the biggest intraday jump since April 2020. They were up 10% at the close in Stockholm, giving the company a market value of about 96.8 billion kronor (US$10.6 billion).
Lundin Energy owns a stake in Norway’s giant Johan Sverdrup field, which is operated by Equinor ASA. It’s also the operator of the Edvard Grieg oil field on the Norwegian continental shelf.
The oil and gas industry has seen a flurry of deal-making as energy majors seek to offload non-core assets and take advantage of improved prices.
Family Owners
Royal Dutch Shell Plc agreed earlier this year to sell its Permian Basin assets in the US to ConocoPhillips for US$9.5 billion, while BHP Group reached a deal to combine its oil and
gas operations with Woodside Petroleum Ltd.
Neptune Energy Group Ltd’s owners are considering a sale which could value the UK explorer at more than US$5 billion, Bloomberg News reported last week.
Lundin Energy’s deliberations are ongoing, and there’s no certainty they will lead to a transaction, the people said. The company could also consider other options such as a merger or asset disposals, the people said.
An investment vehicle controlled by Lundin family trusts is the Swedish company’s biggest shareholder with a 33% stake, according to data compiled by Bloomberg. A representative for Lundin Energy declined to comment.
Investor Pressure
A sale of Lundin Energy would help its family owners get out of their largest oil and gas holding at a time when the industry’s future is increasingly fraught. The Lundins have a range of other interests in the resources sector, with major stakes in roughly a dozen listed companies including copper producer Lundin Mining Corporation, precious metal miner Lundin Gold Inc, gold developer Bluestone Resources Inc and explorer NGEx Minerals Ltd.
Earlier this month, Swedish prosecutors charged Lundin Energy Chairman Ian Lundin and one of the firm’s directors, Alex Schneiter, with alleged complicity in war crimes committed by the former Sudanese regime.
The company said they strongly deny the charges, which relate to past operations in the country which Lundin Energy sold in 2003. The chairman plans not to stand for re-election at next year’s shareholder meeting.
Lundin Energy has been seeking to burnish its environmental credentials amid increasing investor pressure for oil and gas producers to grapple with climate change.
In June, Lundin Energy said it would neutralise its share of direct emissions from the Johan Sverdrup field, a first for a major oil facility.
Source: WorldOil