Lundin announces intention to spin-off its UK business

abarrelfullabarrelfull wrote on 15 Jan 2013 08:01
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4 March 2010

Lundin Petroleum AB (publ) (Lundin Petroleum) is pleased to announce its intention to spin-off its business in the United Kingdom (UK) into a newly formed UK company called EnQuest PLC (EnQuest), in exchange for shares of EnQuest. The shares of EnQuest received by Lundin Petroleum will then be distributed to Lundin Petroleum shareholders.

Proposed Transaction Structure
EnQuest will acquire the UK oil and gas production, development and exploration assets and operations of both Lundin Petroleum and Petrofac Limited, a London Stock Exchange-listed company. EnQuest was recently incorporated for these transactions and will be an independent oil and gas production and development company whose initial activities will be focussed on the United Kingdom Continental Shelf (UKCS).

Lundin Petroleum will receive fifty-five per cent (55%) of the outstanding shares of EnQuest in consideration for the sale of the UK business and proposes to distribute its EnQuest shares to Lundin Petroleum shareholders. Lundin Petroleum shareholders will continue to hold their shares of Lundin Petroleum and will also receive new shares of EnQuest. The shareholders of Petrofac will hold the remaining forty-five per cent (45%) of the outstanding shares of EnQuest. It is expected that entities associated with the Lundin family will be the largest shareholder in EnQuest. EnQuest will apply for admission and primary listing on London Stock Exchange, with a secondary listing on NASDAQ OMX Stockholm.

The transaction is expected to be completed early in the second quarter of 2010.

Objectives
Lundin Petroleum has been reviewing strategic options in relation to its UK assets with the objective of finding ways to potentially unlock Lundin Petroleum shareholder value. Lundin Petroleum believes that this proposed spin-off will provide exposure to a new UK focussed oil and gas company with a substantial reserve and resource base, financial strength and strong management team.

EnQuest aims to become one of the UK's leading independent oil and gas development and production companies. EnQuest will operate a production biased portfolio with exposure predominantly to the significant and low risk hydrocarbon basin of the UKCS. Management of EnQuest intends to deliver sustainable growth in shareholder value by focussing on the exploitation of its existing reserves, commercialising and developing discoveries, converting its significant contingent resources into reserves and pursuing selective acquisitions. Lundin Petroleum believes that EnQuest offers shareholders a new and exciting investment opportunity.

Following the proposed transaction, Lundin Petroleum will continue to own and operate its remaining portfolio of international oil and gas assets with production in Norway, France, the Netherlands, Russia, Indonesia and Tunisia as well as a diverse portfolio of exploration assets. This transaction will downsize Lundin Petroleum with even stronger leverage to success in relation to its high potential exploration drilling programme and new deal opportunities.


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