PGNiG: Signing of a conditional agreement to purchase INEOS E&P Norge AS by PGNiG Upstream Norway AS

The Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG”, the “Company”) announces that on March 25th 2021 the Company’s subsidiary PGNiG Upstream Norway AS (“PGNiG UN”) entered into a conditional agreement to purchase INEOS E&P Norge AS business from INEOS Group (the “Agreement”).
INEOS E&P Norge AS („IEPN”) owns interests in 22 licences on the Norwegian Continental Shelf, including 3 producing fields: Alve, Marulk, Ormen Lange and Nyhamna gas terminal. The estimated volume of hydrocarbon resources associated with IEPN's licence interests is approximately 117million barrels of oil equivalent (as at January 1st 2021), of which over 94% is natural gas. Following the transaction, PGNiG's estimated average gas output in Norway may increase by some 1.5 bcm per annum over the next five years. In addition, PGNiG UN will acquire a portfolio of exploration licences in which IEPN is the operator under 6 licences.
The purchase price is 615 million US dollars as of the effective transaction date of January 1st 2021. The final purchase price will be reduced by revenue earned by IEPN in the period from the effective transaction date, i.e. January 1st 2021, to the date on which PGNiG UN acquires operational control of IEPN. The Agreement is subject to a condition precedent that PGNiG UN obtains corporate approvals within the PGNiG Group. The acquisition of control is conditional upon obtaining administrative approvals in Norway. Information on the fulfilment of the conditions for the acquisition of control over IEPN by PGNiG UN will be provided by the Company in a separate ‘Current Report’.
Acquisition of IEPN is in line with the PGNiG Group Strategy for 2017–2022 (with an outlook until 2026), as announced in Current Report No. 19/2017 of March 13th 2017, by increasing proven hydrocarbon reserves and production. As a result of the acquisition of IEPN, PGNiG UN’s gas production volumes in Norway are estimated to reach a peak level of 4 bcm per annum in 2027.