Pertra ASA, Norwegian energy producer, intends to take over Det Norske Oljeselkap ASA to create the nation's second-largest oil company after StatoilHydro ASA.
Pertra will swap each one of its shares for three shares in DNO-controlled company Det Norske Oljeselkap ASA, which will be the name of the new group. The companies said they expect the deal to be completed in November, and that further financial details would be released later.
The announcement came just over a week after government-controlled Statoil ASA completed its takeover of the oil and gas division of the previous No. 2 producer, Norsk Hydro ASA, to form StatoilHydro.
DNO and Pertra said in a joint statement that the boards of both companies had approved the agreement on Monday but it still required approval by shareholders and Norwegian authorities.
The companies said DNO will be the largest shareholder in the new company, with a stake of up to 39.97 percent. They said the deal calls for DNO to reduce its stake to no more than 25 percent by Dec. 31, 2008.
Under the deal, which sees the new company take over Pertra's existing listing on the Oslo Bors, "Pertra is the informal acquirer, however this is a merger amongst equals," DNO spokesman Ketil Jorgensen told Dow Jones Newswires.
Pertra shares closed up 2.6 percent to 80 kroner (US$14.59, EUR 10.32) on the Oslo stock exchange following the announcement, while DNO was up 1.3 percent at 11.30 kroner (US$2.06, EUR 1.46). Det Norske Oljeselkap ASA is not listed on the exchange.
The new company will operate 17 licenses offshore Norway and expects to operate 20 exploration wells over the next three years, the companies said.
Oslo-based DNO, which has about 30 employees, has interests in Norwegian offshore fields operated by other companies, and is involved in projects in Iraq, Yemen, Mozambique, and Equatorial Guinea. It split off Det Norske Oljeselkap this year as a separate company handling its Norwegian portfolio.
Pertra, based in the western Norway city of Trondheim, specializes in searching for and developing small to medium-sized fields in the waters off Norway. It has a staff of about 50.
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