SAPURA ENERGY AND OMV ENTER INTO A STRATEGIC PARTNERSHIP
Date: 9.11.2018.

Kuala Lumpur, 9 November 2018

Sapura Energy Berhad (Sapura Energy) and OMV on 9 November 2018 signed a Share Subscription Agreement and a Shareholders’ Agreement to form a strategic partnership.

Under the agreements, OMV Exploration and Production GmbH (OMV E&P), a wholly-owned subsidiary of OMV Aktiengesellschaft, will buy a 50 per cent stake of the enlarged issued share capital in a newly-formed joint venture company, SEB Upstream Sdn Bhd (SUP), based on an enterprise value of up to USD1.6 billion comprising an equity value of up to USD1,250 million and debt of USD350 million.

As part of the transaction, OMV will pay USD540 million for 50 per cent interest in SUP at closing by subscribing to newly issued shares. In addition, the parties agreed to additional consideration of up to USD85 million based on certain occurrences mainly linked to the resource volume in Block 30, Mexico at the time of taking the final investment decision. Both parties have also agreed to refinance the existing intercompany debt of USD350 million.

This transaction will result in Sapura Energy receiving up to USD975 million from the proceeds from OMV’s subscription payment of USD540 million and additional consideration of up to USD85 million, as well as from the repayment from the refinancing of intercompany debts of USD350 million.

Sapura Upstream is a major independent oil and gas (O&G) company based in Malaysia with an expected life of field production of approximately 260 million barrels of oil equivalent (mn boe) and strong growth prospects. Production and development assets are located in shallow waters offshore Malaysia. Sapura Upstream’s production entitlement in 2017 was approximately 4.1 mn boe per annum, from fields in Peninsular Malaysia. Sapura Upstream has two natural gas exploration and production blocks offshore Sarawak in a well-developed area with existing infrastructure. The significant discoveries in its SK408 fields offshore Malaysia between 2014 to 2017 showcases Sapura Upstream’s strong in-house upstream capabilities. The development of the SK408 gas fields are on track and first gas is expected in 2020 with a significant ramp-up in 2023. This would lead to an estimated total plateau production entitlement of approximately 21 mn boe per annum which translates to approximately 60 kboe/d.

In addition to its O&G assets in Malaysia, Sapura Upstream also has access to exploration blocks in New Zealand, Australia and Mexico.

“The oil and gas demand is expected to increase by 20 per cent until 2030 in Malaysia and OMV is taking the opportunity to capitalise on this growing market. The cooperation will allow OMV to enter into a partnership with a highly esteemed regional independent company and will support our Upstream strategy towards establishing Australasia as a new core region,” said Rainer Seele, CEO and Chairman of the Executive Board, OMV Group.

Johann Pleininger, OMV Board Member Upstream and Deputy Chairman of the Executive Board: “This acquisition will add attractive reserve volumes to our portfolio and significant near-term increase in production. As Asia Pacific is an attractive growing market, Malaysia will represent OMV’s platform for further regional growth.”

“OMV’s expansion strategy into Asia Pacific bodes well with Sapura Upstream’s long-term growth targets. We believe the partnership will create sustainable growth for the business, realising synergies from both sides to achieve our vision of creating the largest regional independent O&G company,” said Tan Sri Dato’ Seri Shahril Shamsuddin, President and Group Chief Executive Officer, Sapura Energy.

As part of the agreement, the management of the partnership will be based in Malaysia and there will be equal representation from both sides for the board of directors. According to the agreement, OMV will fully consolidate Sapura Upstream in its financial statements.

Completion of the transaction is subject to conditions including Sapura Energy’s shareholder approval, Petronas approval and other third-party consents as well as finalization of the transaction documents including ancillary agreements.

Cautionary note: “Sapura Energy”, “the group” and “the company” are used for convenience where references are made to Sapura Energy Berhad in general. Similarly, words like “we”, “us” and “our” are used to refer to Sapura Energy Berhad in general or to those who work for the company and its subsidiaries, where relevant. This press release may contain forward-looking statements. All statements other than statements of historical facts included in this press release, including, without limitation, those regarding our financial position, financial estimates, business strategies, prospects, plans and objectives for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such forwardlooking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Such forward-looking statements reflect our current view with respect to future events and are not a guarantee of future performance. Forward-looking statements can be identified by the use of forward-looking terminology such as the words “may”, “will”, “would”, “could”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “aim”, “plan”, “forecast” or similar expressions and include all statements that are not historical facts.