Most definitly a merger monday., and it's been awhile.
Statoil buys Brigham Exploration Co.in $4.4 billion deal
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By Katarina Gustafsson
-- Statoil to buy US company Brigham Exploration Co. in $4.4 billion deal
-- Deal gives Statoil acreage in the tight oil plays Bakken and Three Forks, the largest oil accumulations in the U.S.
-- Deal strengthens Statoil's position in unconventional resources
(Rewrites throughout, adding detail, comment, and updating share price)
Statoil ASA /quotes/zigman/285454/quotes/nls/sto STO -2.45% Monday announced the acquisition of Texas-based oil firm Brigham Exploration Co. /quotes/zigman/62908/quotes/nls/bexp BEXP +19.83% in a deal that will strengthen the Norwegian oil and gas major's position in the U.S. oil and gas industry and bring a stronger foothold in unconventional resources.
The Norwegian company will buy Brigham for $36.50 a share in an all-cash tender offer, a 36% premium over the average trading price for the last 30 days. The total equity value of the deal is approximately $4.4 billion, with an enterprise value of about $4.7 billion.
Brigham has over 100 employees and the deal will give Statoil more than 375,000 net acres in the Williston Basin, which has the potential for oil production from the Bakken and Three Forks formations -- the largest oil accumulations in the U.S. Brigham also holds interests in 40,000 net acres in other areas.
"Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil. We are positioning ourselves as a leading player in the fast growing U.S. onshore oil and gas industry, in line with the strategic direction we have set out," said Statoil Chief Executive Helge Lund.
Commercial tight oil extraction is a relatively new activity and has increased significantly in the last couple of years, Statoil said. Tight oil reservoirs are developed using methods similar to shale gas--another unconventional source in which Statoil is already present in the U.S. at the Marcellus and Eagle Ford fields.
"We believe that unconventional resources will play an increasingly important role in global energy supply. And we want to be an early entrant into these new areas," Lund said.
"These are resources where you can add value through technology--and through the deep understanding of reservoirs and the subsurface which we have."
The Brigham deal also gives Statoil about 690 kilometers of oil, natural gas and water transportation systems in the Williston Basin.
Brigham's board of directors unanimously recommended shareholders accept the offer. Tudor, Pickering, Holt & Co. Securities, Inc. and Goldman, Sachs & Co. are acting as financial advisors to Statoil and Vinson & Elkins LLP is acting as legal advisor to Statoil on this transaction.
At 1109 GMT, Statoil's shares were 0.7% lower at NOK136.90.
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