DNO has reached an agreement on transferring various license interests offshore Norway to Equinor.

In exchange, DNO would benefit from a much reduced decommissioning deposit and an associated improvement in near-term liquidity.

Decommissioning payment significantly reduced

Last year, under its deal to acquire Sval Energi, DNO took on an obligation to pay a post-tax deposit this month for decommissioning liabilities to Equinor related to the Ekofisk and Martin Linge fields in the North Sea.

Equinor would retain the deposit until the fields have been decommissioned.

Under the new agreement, the deposit would be reduced to a one-time payment, improving near-term liquidity by more than $35 million.

In exchange, DNO would hand Equinor a 20% interest in North Sea license PL293B and 293 CS, containing the Kveikje discovery; 29% in PL827 S (Heisenberg discovery); and 10% in PL1245 (exploration license containing the Romsås prospect).

DNO retains key North Sea growth position

DNO would still retain 20% in both Heisenberg and PL1245.  The transaction remains subject to government approvals.

Executive chairman Bijan Mossavar-Rahmani said: “Divesting selected non-core license interests offers an alternative route to fast-track monetization of exploration discoveries, releasing value early and strengthening DNO’s near-term financial muscle.

“Reserves and output are unchanged, and DNO remains on track to raise North Sea production to 100,000 boe/d by 2030.”