7 December 2017
DETAILS
signed a letter of intent today to merge
their respective oil and gas businesses in a joint venture,
which would operate under the name
Wintershall DEA.
The oil and gas business of BASF
is bundled in the Wintershall Group
consisting of Wintershall Holding GmbH and its subsidiaries,
including the gas transportation business.
The oil and gas business of LetterOne
comprises DEA Deutsche Erdöl AG and its subsidiaries.
By combining these two German-based entities,
their parent companies strive to
* create a basis for further profitable growth,
* optimize the portfolio footprint of the combined business
* and realize synergies.
Wintershall DEA would have significant growth potential
and be one of the largest independent
European exploration and production companies.
In the medium term, BASF and LetterOne
envisage to list Wintershall DEA through an initial public offering.
It is intended to form Wintershall DEA
by LetterOne contributing all its shares
in DEA Deutsche Erdöl AG into Wintershall
against issuance of new shares to LetterOne.
Based on the valuation of the exploration and production businesses,
BASF shall initially hold 67%
and LetterOne shall hold 33% in Wintershall DEA.
In this shareholding ratio, Wintershall’s gas transportation business
is not accounted for.
As of closing, Wintershall DEA shall issue
a mandatory convertible bond to BASF
reflecting the value of Wintershall’s gas transportation business.
No later than 36 months after closing, this bond
shall be converted into new shares in Wintershall DEA,
resulting in a higher shareholding ratio for BASF.
In 2016, the combined business had
* pro-forma sales of €4.3 billion,
* EBITDA of €2.2 billion and
* net income of €326 million.
Overall, production volumes of Wintershall and DEA amounted to
* 215 million barrels of oil equivalent (BOE) in 2016,
* this equals a production of around 590,000 BOE per day.
* Based on proven reserves (1P) of 2.1 billion BOE
at the end of 2016,
* the reserve to production ratio of the combined business
would be around 10 years.
Contact BASF SE
- Jens Fey
Head of Media Relations- +49 621 60-99123
- Dr. Stefanie Wettberg
Senior Vice President Investor Relations- +49 621 60-48002
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