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Agreement Between OMV and Pioneer Natural Resources

Source: www.gulfoilandgas.com 1/6/2011, Location: Africa

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OMV, the leading energy Group in the European growth belt, through its fully owned subsidiary OMV (Tunesien) Production GmbH, signed an agreement to purchase 100% of the issued share capital of Pioneer Natural Resources Tunisia Ltd. and Pioneer Natural Resources Anaguid Ltd. (together "Pioneer Tunisia") from Pioneer Natural Resources, an independent US oil and gas company, for a purchase price of USD 800 mn plus working capital of Pioneer Tunisia. The working capital amounts to USD 65.7 mn and will be adjusted as of closing based on the 2010 audited financial statements as well as any dividend distributions to and capital contributions from the seller following December 31, 2010. Closing of the transaction is expected in Q1/11.

Jaap Huijskes, OMV Executive Board member, responsible for E&P, stated: "I am delighted to announce this acquisition of Pioneer's Tunisian subsidiaries, as a result of which OMV will substantially increase its production and reserves base in Tunisia, thus ensuring a sustainable business in the years to come. OMV is fully committed to unlocking the hydrocarbon resource potential in southern Tunisia together with its partners and to supplying gas to the domestic market. The acquisition is in line with the company's strategy to achieve synergy effects with existing OMV assets and to pursue bolt-on acquisitions in E&P to enable future growth."

The transaction will significantly strengthen OMV\s position in Tunisia, an important country in the E&P core region North Africa. OMV will acquire immediate production of approximately 5,700 boe/d (average net production in Q4/10), 90% is attributable to oil and 10% to gas. Based on a report by DeGolyer MacNaughton of June 2010, Pioneer Tunisia's acreage holds 2P reserves of 38 mn boe and 3P reserves of 59 mn boe. The acreage offers considerable exploration upside and will complement OMV's existing south Tunisian assets, Jenein Sud and Nawara, very well. From a strategic point of view, OMV will be able to unlock substantial synergy potential in field operational activities. Furthermore, Pioneer Tunisia and OMV are both partners in the South Tunisia Gas Project (STGP) which aims to build a 320 km gas pipeline from the Adam production concession to the city of Gabes by 2014 to supply the Tunisian domestic market with gas. With the reached consolidated partnership structure, the decision making process for the STGP will be facilitated.

The transaction consideration will be initially funded with existing cash and committed credit lines. OMV remains committed to strict capital discipline and retains the clear objective of maintaining a strong investment grade credit rating.

Pioneer Tunisia's interest in the Anaguid exploration permit and in the Mona/Durra production concession is subject to a pre-emption right of Pioneer Tunisia's partner under the respective Joint Operating Agreement. Anaguid and Durra/Mona account for 13% of the purchase price. In case the pre-emption right is exercised and Pioneer Tunisia's partner acquires the shares in Pioneer Natural Resources Anaguid Ltd., the purchase price will be adjusted accordingly.

Balanced international E&P portfolio
OMV holds a balanced international E&P portfolio in 17 countries structured around six core regions, namely CEE, North Africa, Northwestern Europe, the Middle East, Australia/New Zealand and the Caspian region. OMV's daily production in 9m/10 is approximately 317,000 boe/d and the Company's proven reserves at the end of 2009 were approximately 1.19 bn boe.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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