Norwegian oil group StatoilHydro agreed to buy stakes in projects in Brazil and the U.S. Gulf of Mexico from U.S. group Anadarko for up to $2.1 billion, expanding its international portfolio.
The deal announced on Tuesday gives StatoilHydro the 50 percent it does not own in Brazilian field Peregrino and a 25 percent in the Kaskida discovery in the U.S. Gulf of Mexico.
StatoilHydro is struggling to replace declining oil production from maturing fields off Norway and in the past year bought other Gulf of Mexico fields, a Canadian oil sands venture and part of a big Arctic gas project in the Barents Sea.
The Norwegian group said it will pay Anadarko $1.8 billion for the assets plus a "maximum pre-tax value of $300 million related to the Peregrino field to be earned by 2020 conditional on future oil prices above pre-determined thresholds."
"We consider this a strategically sensible and reasonably priced deal which increases exposure in an area of technical strength and brings material resource upside beyond 2015," Citibank analyst Mark Bloomfield said in a note.
StatoilHydro's international chief Peter Mellbye told Reuters an oil price of "somewhat below $50 per barrel" -- or half of the market price -- was used in deal calculations.
Shares in StatoilHydro were down 0.3 percent to 159 crowns. Anadarko shares closed up 0.7 percent at $64.20 in New York on Monday.
"This transaction is the result of an unsolicited offer from StatoilHydro that enables us to accelerate the value of these longer-term projects while focusing our capital back into our nearer-term captured resource potential," Anadarko Chief Executive Jim Hackett said in a statement.
Anadarko said the proceeds would be used to reduce debt.
The sale is "positive for Anadarko as it is accretive, tax efficient, reduces debt, accelerates the monetization of a portion of their extensive portfolio of unbooked risked upside," research firm Simmons & Co. wrote in a note.
The deal also allows the Houston company to redirect capital to high-growth areas such as the Rocky Mountains, Simmons said.
International activities, which now pump every fifth barrel for StatoilHydro, are seen driving its output growth with production abroad forecast at 650,000 barrels of oil equivalent per day in 2012, up from some 500,000 boed in 2008.
Asked about possible further acquisitions, Mellbye said: "Acquisitions are something that we always evaluate. The next thing we plan to do is participate in the next lease round in the Gulf of Mexico."
He also voiced hope that StatoilHydro, which has been an active bidder in recent lease rounds in the U.S. Gulf of Mexico and in Alaska, would also take part in a round for more Brazilian offshore acreage if it included interesting areas.
"This is the best thing they could do to grow, even though the price is relatively high with break-even to Brent near $50 per barrel," Kaupthing analyst Anne Gjoen said of the Anadarko deal. She said Brazil was the world's most interesting developing oil region.
Peregrino, in the Campos Basin offshore Brazil, holds some 500 million barrels of heavy oil and is expected to come on stream in 2010. It is being developed with a floating production storage and offloading vessel (FPSO) and two platforms and will produce 100,000 barrels per day within the first year.
"StatoilHydro sees significant upside in the recoverable resources in Peregrino, both by a further increase in today's 20 percent recovery factor and by including additional resources outside the Peregrino main field," StatoilHydro said.
Citigroup said the initial $1.8 billion payment would raise StatoilHydro's end-2008 gearing towards 16 percent from 11 percent, while giving "financial headroom" to keep paying dividends and looking for "further opportunistic deals".
StatoilHydro said Kaskida was one of the largest deepwater discoveries in the U.S. Gulf of Mexico in recent years. No reserve potential for the find has been disclosed.
BP is its operator with a 55 percent stake and U.S. Devon has 20 percent in the block 292 license in Keathley Canyon, where StatoilHydro has several other leases.
"The Kaskida discovery has significant resource potential. By leveraging our deepwater technologies, we believe we can add even more value to the discovery," said StatoilHydro, adding that the project secured "long-term growth beyond 2015".
StatoilHydro said both transactions depend on government approval. Other Kaskida partners also have pre-emption rights within the next 30 days, the Norwegian group said.