The offtake agreement covers the entirety of DNO's Norwegian gas production following its acquisition of Sval Energi Group.
Effective from October 1, the four-year agreement ensures premium pricing for DNO’s gas output. Alongside this, DNO has secured a financing facility with a U.S. bank for up to $500 million. This facility supports DNO by financing the value of up to 270 days of projected gas production based on future sales receivables. The interest rate for drawn amounts is notably lower than standard reserve-based lending terms, with no fees for undrawn amounts and no financial covenants.
Funds from this financing will replace Sval Energi’s existing facilities and support general corporate activities. DNO has also repaid over $600 million in reserve-based loans across its North Sea subsidiaries, opting for this more favorable financing arrangement. Additionally, DNO secured a $300 million one-year bridge loan to enhance its financial flexibility, as noted by DNO Executive Chairman Bijan Mossavar-Rahmani: “to add more arrows to our quiver.”
“We have received strong interest by buyers to prepurchase our enlarged North Sea production of 80,000 barrels of oil equivalent per day split about equally between oil and gas,” Mossavar-Rahmani stated. “These three-way transactions are made possible because buyers are eager to lock in secure supplies of Norwegian oil and gas and U.S. banks, in particular, have significantly stepped up fossil fuel lending.”
DNO is also exploring a similar offtake and financing arrangement for its North Sea oil production. The recent acquisition of Sval Energi, finalized last month for $450 million in cash, has significantly boosted DNO’s North Sea output to 80,000 barrels of oil equivalent per day. The acquired portfolio includes interests in 16 producing fields in Norway, with key assets such as Nova, Martin Linge, Kvitebjørn, Eldfisk, Maria, Symra, and Ekofisk.
Sval Energi’s 2024 net production is 64,100 barrels of oil equivalent per day, with 141 million barrels of oil equivalent in proven and probable reserves and 102 million in contingent resources. The portfolio, balanced between liquids and gas, offers growth potential through ongoing developments like Maria Revitalization, Symra, and Dvalin North, as well as discoveries such as Cerisa, Ringhorne North, and Beta, and redevelopment opportunities like Albuskjell and West Ekofisk. This acquisition has increased DNO’s North Sea proven and probable reserves to 189 million barrels of oil equivalent and contingent resources to 316 million.
