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New offer for Saga

June 10, 1999, 07:00 CEST

An offer to acquire all the shares in Saga Petroleum at NOK 135 per share has been made by Norsk Hydro in association with Statoil. The bid is structured so that Saga shareholders will receive one Hydro share for every three Saga shares plus a cash payment.

Other principal elements in the offer include:

  • the deadline for accepting the offer is set to 17.00 on 18 June, with settlement scheduled around 25 June
  • the bid must be accepted by shareholders owning 70 per cent of the Saga stock
  • the aim is to strengthen earnings on the Norwegian continental shelf and the basis for future international expansion
  • the only condition is approval by Hydro's general meeting
  • Statoil will acquire about 25 per cent of Saga's assets at market price
  • Hydro will take over Saga's organisation and roughly 75 per cent of its assets
  • Saga's employees will be treated on equal terms with Hydro's existing personnel in organisational adjustments.

If the bid succeeds, the agreement between Statoil and Hydro assumes that the former will receive equity interests and other assets in exchange for its shares. It will also be able to acquire a further five per cent of Saga's assets for a cash payment at market price.

The equity interests due to be transferred to Statoil, assuming that the offer achieves the required 70 per cent acceptance, are unchanged from the agreement with Hydro of 27 May. This has already been made public in its entirety. The price of assets to be acquired has been modified to reflect the higher offer.

Through this agreement, Statoil will increase its equity holdings in its priority core areas on the Norwegian continental shelf. The deal means increased production for the group - about 80000 barrels of oil equivalent per day - and will boost its proven and probable reserves by about 11 per cent. That in turn provides the basis for good coordination and improved efficiency in areas where Statoil has its greatest strategic interests.

In addition to acquiring assets, the group will take over on 1 June 2003 as production operator for the Snorre and Visund fields in the Norwegian North Sea.
Statoil is also to become operator for the Kristin field in the Norwegian Sea and for further development of the Halten Bank South and Norne South areas of this sea.

Further information from: John Ove Lindøe tel.: +47 51 99 68 81 (office)
Wenche Skorge tel.: +47 51 99 79 17 (office)