BASF and letterone set up an oil and gas joint venture

BASF and letterone recently signed a final deal to merge their respective oil and gas businesses into a joint venture that will operate under the name of wintersharedea. "Through winershall DEA, we have created a leading independent European exploration and production company with international operations in core areas. "BASF and letterone laid the foundation for further profitable growth by merging the two German entities," said Dr Hans Ulrich Engel, vice chairman of the executive board and chief financial officer of BASF Europe. BASF and letterone's medium-term vision is to list wintershare DEA through IPO. The deal is expected to be completed in the first half of 2019, subject to the approval of the merger control and foreign investment authorities, as well as the mining authorities and the federal network of Germany. Windershall and DEA will continue to operate as independent companies until the end of the period. In 2017, windershall's and DEA's combined operations are expected to generate sales of EUR 4.7 billion, EBITDA of EUR 2.8 billion and net income of EUR 740 million. In 2017, windershall and DEA produced a total of 210 million barrels of oil equivalent of about 575000 barrels of oil equivalent per day.

The joint venture will drive a more balanced business with growth opportunities in core areas and produce between 75000 and 800000 barrels of oil equivalent per day between 2021 and 2023. In the third year after the completion of the transaction, at least 200 million euros of synergies are expected to be generated each year.. Mario Mehren, chief executive officer of winershall, has been identified as chairman and chief executive officer of the Management Committee of winershall DEA. Maria moraeus Hanssen, chief executive officer of DEA, has been identified as the deputy chief executive officer and chief operating officer of the joint venture. In addition, Thilo Wieland, executive board member of wintershare, and Hugo dijkgraaf, managing director of wintershare Norge, will serve as one of the five members of the Management Committee of wintershare DEA. The appointment of the chief financial officer will be announced later. Letterone will sell all of its shares in deadeutscheerd ö lag to windershall holding GmbH for new shares in the joint venture. Winershall will be renamed winershall DEA, headquartered in Kassel and Hamburg. BASF initially held 67% of the original shares, while letterone held 33% of the common shares of windershall DEA, reflecting the value of windershall and DEA's respective exploration and production businesses. BASF will receive additional preferred shares to reflect the value of windershall's gas transportation business. No later than 36 months after the closing, but in all cases prior to the IPO, these preferred shares will be converted into common shares of wintershare DEA. This will result in a total equity stake of 72.7% in wintershare DEA.