LetterOne and BASF Sign Letter of Intent to Merge Their Oil and Gas Businesses to Create Wintershall DEA

London (ots/PRNewswire) -

- BASF and L1 Energy, the energy investment arm of LetterOne,
announce their intention to merge their oil and gas subsidiaries
- Wintershall DEA to be one of the largest independent European
exploration and production companies
- Wintershall DEA to be governed jointly by L1 Energy and BASF,
with
joint headquarters in Hamburg and Kassel
- IPO envisaged in the medium term
- Closing could be expected in the second half of 2018, subject to
customary regulatory approvals, completion of due diligence
process, and negotiation of definitive transaction agreements.
There is no assurance that the intended transaction will be
consummated.

LetterOne announced today that it has signed a Letter of Intent
with BASF to combine the parties' oil and gas businesses in a joint
venture. The new merged entity would operate under the name
Wintershall DEA.

By combining these activities, the companies strive to create a
sound footing for sustainable long-term growth, optimize the
portfolio of the combined business, and realize synergies.
Wintershall DEA would have significant growth potential and be one of
the largest independent European exploration and production
companies. In the medium term, L1 Energy and BASF intend to list
Wintershall DEA through an IPO.

Wintershall DEA's Chief Executive Officer will be determined by
BASF, with the Deputy Chief Executive Officer being determined by L1
Energy. The company shall be headquartered jointly in Hamburg and
Kassel.

Lord Browne, the Executive Chairman of L1 Energy and Chairman of
the Supervisory Board of DEA, said: "Wintershall DEA will be one of
Europe's largest independent E&P Companies, with the scale needed to
generate sustainable growth long into the future. We look forward to
creating jointly with BASF a new company, with activities in new
places, new perspectives and new prospects for the future"

In the coming months, L1 Energy and BASF will prepare and conduct
a confirmatory due diligence process and negotiate definitive
transaction agreements. Closing could be expected in the second half
of 2018, subject to customary regulatory approvals. Until closing,
DEA and Wintershall will continue to operate as independent
companies. There is no assurance that LetterOne and BASF will enter
into definitive transaction agreements or that the intended
transaction will be consummated.

In order to form Wintershall DEA, it is intended that L1 Energy
will contribute DEA into Wintershall against issuance of new shares
to L1 Energy. Based on the valuation of the exploration and
production businesses, BASF shall initially hold 67% and L1 Energy
shall hold 33% of Wintershall DEA. In this shareholding ratio,
Wintershall's gas transportation business is not accounted for. As of
closing, Wintershall DEA shall issue a mandatory convertible bond to
BASF reflecting the value of Wintershall's gas transportation
business. No later than 36 months after closing, this bond shall be
converted into additional shares in Wintershall DEA for BASF.

DEA's average production in 2016 was 138,000 barrels of oil
equivalent (BOE) per day. The combined business would have had
pro-forma production of approximately 590,000 BOE per day in the same
period. Based on the combined proven reserves (1P) of 2.1 billion BOE
at the end of 2016, the reserve to production ratio of the combined
business would be around 10 years.

Notes

DEA Deutsche Erdoel AG is an international operator in the field
of exploration and production of crude oil and natural gas based in
Hamburg. Its focus is on safe, sustainable and environmental
conscious exploitation of oil and gas. DEA has 118 years of
experience working along the whole upstream value-chain as operator
or project partner. With a workforce of 1,150 employees DEA has
shares in production facilities and concessions in, among others,
Germany, Norway, Denmark, Egypt, Algeria and Mexico. Production of
DEA averaged 138,000 barrels of oil equivalent (BOE) per day in 2016;
as of year-end DEA had 1P reserves of 483 million BOE, and 2P
reserves of 667 million BOE.

Wintershall, headquartered in Kassel, Germany, focuses on
exploration and production in oil and gas-rich regions in Europe,
Russia, South America, North Africa, and the Middle East. Together
with Gazprom, Wintershall is also active in the transportation of
natural gas in Europe. The company has about 2,000 employees
worldwide and is Germany's largest, internationally active crude oil
and natural gas producer. Wintershall's production averaged 452,000
BOE per day in 2016; as of year-end Wintershall had 1P reserves of
1.6 billion BOE.

L1 Energy is the energy investment arm of LetterOne. LetterOne was
founded in 2013 and is an international investment business
headquartered in Luxembourg. LetterOne's strategy is to build a new
portfolio of successful companies that are leaders in their fields
and sectors. It makes long-term investments of its own capital in
companies in which its sectoral experience and strategic and
geographic expertise will improve performance and help companies
grow. It has recruited world-class CEOs, sector investment teams and
Advisory Boards to invest at scale. It buys and build assets, which
it can develop over time as platforms of long-term sustainable
growth. It invests through L1 Energy, L1 Technology, L1 Health and L1
Retail.

Contact: Stuart Bruseth, 07739 630539, sbruseth@letterone.com

ots Originaltext: L1 Energy
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Original-Content von: L1 Energy, übermittelt durch news aktuell