Harbour Energy Completes Acquisition of Wintershall Dea Assets

Harbour Energy has successfully completed the acquisition of Wintershall Dea’s upstream assets, excluding Russia-related activities, marking a significant expansion in its portfolio. This acquisition, effective on June 30, 2023, includes substantial assets in Norway, the United Kingdom, Germany, Argentina, Mexico, Southeast Asia, and North Africa, solidifying Harbour Energy’s position as one of the largest independent oil and gas companies globally.

Harbour Energy signed and agreement with Wintershall Dea’s shareholders, BASF (72.7%) and LetterOne (27.3%), in December 2023 to merge the businesses, follogin all regulatory approvals. With this acquisition, Harbour Energy now has a production capacity of approximately 475Mboe/d. The transaction aligns with Harbour's energy transition goals by reducing operational emissions and strengthening its carbon capture and storage project portfolio. The company has a portfolio amounting to 1.5Bboe 2P reserves and 1.8Bboe 2C resources, including opportunities in Norway, unconventionals in Argentina and offshore projects in Mexico and Indonesia.

“I thank the departing Management Board, and I thank the whole Wintershall Dea team for working professionally despite the significant challenges of the last nine months. Now we are concentrating on divesting the remaining assets, and providing services to Harbour Energy in the coming months. We are also preparing to close down our headquarters. As we do this, we will continue to work as Wintershall Dea always has done – with responsibility and professionalism,” said Stefan Schnell, Senior Vice President Group Reporting & Performance Management at BASF SE, in a Wintershall Dea release.

According to Wintershall Dea, the company’s remaining assets include stakes in the joint ventures in Russia, the ownership interest in Wintershall AG in Libya (51%), in Wintershall Noordzee BV in the Netherlands (50%) as well as the share in Nord Stream AG (15.5%). Wintershall Dea’s management had previously announced its withdrawal from activities in Russia in January 2023.

Expansion in Mexico

In Mexico, Harbour Energy has significantly expanded its presence, becoming one of the leading private oil and gas operators and investors in the country. The company aims to remain a reliable and strategic partner in Mexico and is enthusiastic about the future development of its public-private investment projects, such as the Zama project. Harbour Energy is also advancing in the Kan and Polok fields and the producing fields Hokchi and Ogarrio, reaffirming its long-term commitment to Mexico’s energy sector.

Gustavo Baquero has been appointed as the new Country Director for Mexico, bringing extensive global energy sector experience to the role. 

Zama Field

Zama is considered one of the most promising shallow water fields in the world, and represents one of Wintershall’s most important assets in Mexico. However, its development has followed a rocky path, as it was later discovered that the reservoir extended into PEMEX’s Uchukil project. Still, a resolution came in due time and now the field is lined up to become one of Mexico’s most important developments.

Wintershall Dea mentioned that it is focusing on actively contributing as a partner to the Zama asset to ensure that the field is developed in the most efficient timeframe and in the best possible technical manner. 

At Mexico Oil and Gas Summit 2023, Sylvain Petiteau, Management Office at Zama Integrated Project Team, Wintershall Dea, discussed working with PEMEX for this project. “The idea is to work as Zama, not as individual companies. I am not saying this is the ideal model and all companies must follow it. Every project has its specific features but exploring the capabilities and differences between the Zama team’s members, this is something we perceived as positive,” Petiteau said.

Acquisition Funding Structure and Financial Position

Harbour Energy financed the acquisition through a combination of equity issuance valued at US$4.15 billion, the transfer of approximately US$4.9 billion in euro-denominated Wintershall Dea bonds, and a cash consideration of US$2.15 billion. Of the cash consideration, around US$0.4 billion was covered by adjustments under the Business Combination Agreement, including a pre-completion dividend funded by cash flow from the acquired portfolio. The remaining US$1.8 billion was funded from Harbour’s US$1.5 billion bridge facility and US$0.3 billion of existing cash. The bridge facility will be partially repaid using some of the US$0.8 billion in cash balances within the acquired portfolio.

Harbour Energy has updated its 2024 guidance to reflect the impacts of the acquisition. This includes contributions from Harbour’s legacy assets over 12 months and from the newly acquired portfolio over four months. The updated guidance also provides proforma equivalent metrics for a full 12-month contribution from both Harbour’s legacy assets and the acquired portfolio.

• Production: 250-265Mboe/d; proforma 470-485Mboe/d
• Unit operating costs: US$16-US$17/b; proforma US$13-US$14/b
• Total capital expenditure: US$1.7 billion; proforma US$2.7 billion

“We are extremely proud to have completed the Wintershall Dea acquisition. It marks our fourth and most transformational acquisition since we were founded in 2014, and is another big step forward as we continue to build a large, global independent oil and gas company focused on the safe and responsible production of the oil and gas the world still need,” said Linda Cook, CEO, Harbour Energy, in Harbour Energy’s release.