Page 18 - Euroil Week 20 2020

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NEWS IN BRIEF
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Bankers Petroleum reportedly sues former director
Albania’s largest oil producer Bankers Petroleum has sued its former general director Leonidha Cobo for corruption, accusing him of taking bribes from companies Bankers traded with, local media reported on May 18.
Bankers launched operations in Albania in 2004. In 2016 the company was purchased from its Canadian owned by Chinese Geo-Jade Petroleum for CAD575mn (€400mn).
According to Bankers Petroleum Albania, subcontractors and suppliers acquired contracts from Bankers Petroleum by paying a corruptive commission to Cobo, Exit.al reported.
Last week, the company also sued Cobo and several other former chief executives for breaching their confidentiality agreements during the time they were working for Bankers and in the two years after they left.
The company claims that damages caused by these actions amount to millions of euros.
Cobo denied the accusations, as reported by Euronews.al, and claimed that they were made to distract public attention from the company’s current management and debt problems.
This is the second lawsuit filed by the company against former Bankers executives who are suspected of abusing their positions.
Equinor issues $3.4bn in bonds
Equinor has sold $3.4bn of euro and US dollar-denominated bonds, it announced on May 18.
“In the current volatile market situation characterised by high uncertainty going forward, we see the value in further increasing our financial flexibility and resilience,” CFO Lars Christian Bacher said in a statement.
Initial issues of a six-year EUR750mn ($819mn) bond and a 12-year EUR1bn euro bond earlier on May 18 were followed shortly after by two US dollar tranches of $750mn each, with maturities of six and 10 years.
“The net proceeds from the issue of the Notes will be used for general corporate purposes, which may include the repayment or purchase of existing debt, or other purposes,” Equinor said.
The new bonds follow last month’s $5bn debt sale in which maturities ranged from five to 30 years.
Equinor has taken a range of steps in recent weeks to preserve cash, including the indefinite postponement of a $5 billion share buyback programme and cuts to operating costs and investment of about $3bn.
It also slashed its quarterly dividend by two thirds, blaming low oil prices amid the new coronavirus outbreak for the first cut in its payout since the financial crisis.
The 2026 euro bonds pay interest of 0.75% while the 2032 euro issue comes with a 1.375% coupon. The two dollar bonds carry a yield of 1.75% and 2.375% for the 2026 and 2030 issues respectively.
Equinor’s net debt ratio, or gearing, stood at 25.8% at the end of the first quarter, two percentage points higher than in the previous quarter.
Wintershall earnings slump in Q1
Germany’s Wintershall Dea reported a steep fall in earnings in the first quarter of 2020, prompting it to cut costs and reduce oil and gas exploration.
Production amounted to 626,000 barrel of oil equivalent per day (boepd) in Jan- March, unchanged from the same 2019 period, the company said in a statement on Wednesday.
Due to a weaker price environment for commodities, earnings before interest, tax, depreciation, amortization, and exploration expenses (EBITDAX) fell by 42% to EUR481mn ($526mn).
Wintershall reported a loss of EUR78mn in adjusted net income after EUR320mn in the prior year.
A previous plan to float Wintershall DEA, the oil and gas business that BASF owns jointly with Russia’s LetterOne, during the second half of 2020 was off the table.
Like its peers, the company faces slumping oil and gas demand during the coronavirus crisis.
“We have taken decisive actions by reducing our capital expenditure by 30%, operating costs by 10% and as previously announced, suspended our common dividend,” Chief Executive Mario Mehren said.
Full-year capital spending on production and development was reduced by 30% to EUR1bn to 1.2bn, Wintershall said.
Exploration costs will be reduced by
20%.
Wintershall, which had already
suspended its dividend on March 18, also said it had increased working capital lines by EUR450mn to EUR2.4bn to boost liquidity.
Wintershall recently reported promising oil finds in Norway and offshore Mexico.
NEO Energy, Total revises UK North Sea deal
HitecVision’s NEO Energy company has renegotiated the terms of the acquisition of Total’s UK North Sea assets, first announced in July 2019.
The original agreement stipulated that Petrogas NEO, a joint venture between Petrogas, the exploration and production arm of the Oman-based conglomerate
MB Holding, and Norway-based private equity investor HitecVision’s company NEO would acquire Total’s stakes in 10 UK offshore fields for $635nb. These stakes were previously owned by Maersk Oil, which Total acquired in March 2018.
In a statement on May 20, HitecVision and NEO said that reflecting recent significant market volatility, NEO, HitecVision, and Total “have renegotiated the financial terms of the deal to respond to the current environment.”
Also, the previous deal partner Petrogas is no longer part of the transaction. Subject to regulatory approvals, the parties expect to complete the transaction by Q3 2020.
“HitecVision and NEO have worked closely with Total to restructure the
deal. The agreed revisions respond to current market conditions and retain the attractiveness of the transaction for Total and HitecVision. The structure of the consideration and phasing of payments have been modified, including vendor financing and earnout arrangements. We look forward to progressing swiftly to completion and for NEO Energy to take over the operation of this business,” the statement issued on Wednesday reads.
“Total and NEO Energy have developed detailed transition plans to deliver smooth handover of operations upon completion to allow NEO to focus on embedding planned operating efficiencies and growth plans as rapidly as possible,” the companies said.
Jean-Pierre Sbraire, CFO at Total. “We look forward to progressing swiftly to completion and for NEO Energy to take over operations. We are confident that this sale is the right thing for both parties and for the business and its employees.”
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Week 20 21•May•2020