Divesting US gas business

An offer from Equitable Resources Inc to acquire the exploration and production arm of US subsidiary Statoil Energy Inc for USD 630 million has been accepted by Statoil.

Subject to customary closing conditions and regulatory approval, the transaction is expected to close in February 2000.

This divestment comprises natural gas production and exploration operations in the north-eastern USA, where Statoil Energy is a leading gas producer.

This sale includes gas reserves totaling approximately 40 billion cubic metres, 6,500 production wells and 6,400 kilometres of pipeline network in Kentucky, West Virginia, Pennsylvania and Ohio. Statoil Energy has been a substantial player in the US energy market with estimated 1999 revenues of USD 4 billion.

Equitable Resources is an integrated energy company with the emphasis on natural gas production, transmission and distribution, and whose operations are contiguous with Statoil Energy in the north-eastern USA. Equitable’s market capitalisation is USD 1.1 billion and the company is headquartered in Pittsburgh, Pennsylvania.

Sale of the exploration and production business is the first step of Statoil's overall plan for the complete divestment of Statoil Energy. Statoil Energy's remaining businesses; power generation, energy trading and marketing will be offered for sale in a separate process starting early next year.

Announced in October, the sale of Statoil Energy forms part of an overall restructuring programme to concentrate the group on four core business activities – exploration and production, European gas, energy marketing and petrochemicals.

Further information from: John Ove Lindøe tel.: +47 51 99 68 81