Non-Integral Shareholding in Wintershall Dea
With the merger of Wintershall Holding GmbH and DEA Deutsche Erdoel AG in May 2019, two successful companies with a long tradition have formed Europe’s leading independent natural gas and oil company: Wintershall Dea.
The company with German roots and headquarters in Kassel and Hamburg explores for and produces gas and oil in 13 countries worldwide in an efficient and responsible manner. With activities in Europe, Russia, Latin America and the MENA region (Middle East and North Africa), Wintershall Dea has a global upstream portfolio. Furthermore, with its participation in natural gas transport, it is also active in the midstream business.
Wintershall Dea stands for over 125 years of experience as an operator and project partner along the entire E&P value chain. The company employs around 2,500 people worldwide from over 60 nations.
Following the approval of all relevant authorities, BASF and LetterOne successfully completed the merger of Wintershall and DEA on May 1, 2019. BASF holds 67% and LetterOne 33% of Wintershall Dea’s ordinary shares, reflecting the value of the respective exploration and production businesses of Wintershall and DEA. To reflect the value of Wintershall’s gas transportation business, BASF received additional preference shares. This resulted in BASF having a total initial shareholding in Wintershall Dea of 72.7%. No later than 36 months after closing but definitely before an Initial Public Offering (IPO), these preference shares will be converted into ordinary shares of Wintershall Dea. BASF and LetterOne envisage to list Wintershall Dea via an IPO in the second half of 2021, subject to market conditions.
|Revenues and other income||3,892||5,930|
|Adjusted net income2||195||512|
1 EBITDAX is defined as revenues and other income, less production and operating expenses, less production and similar taxes, less general and administrative expenses and less cost of sales midstream, adjusted for special items.
2 Adjusted net income is derived from EBITDAX less depreciation and amortization, less exploration expenses, plus financial income, less financial expenses and less income taxes, adjusted for special items and tax effects on adjusted special items and disregarded items (e.g., impairments on assets).
3 The 2019 figures have been revised in accordance with the adjusted definitions of EBITDAX and adjusted net income adopted as of Q4 2020 (see footnotes 1 and 2).
In 2020, Wintershall Dea had revenues and other income of €3.9 billion, income from operations before depreciation, amortization and exploration (EBITDAX) of €1.6 billion and adjusted net income of €195 million. Total production of Wintershall Dea (excluding Libya onshore) was 623,000 barrels of oil equivalent per day (BOEPD). As of December 31, 2020, proven and probable reserves stood at 3.6 billion barrels of oil equivalent (BOE), corresponding to a reserve to production ratio of 16 years. The integration of the former Wintershall and Dea businesses was completed and Wintershall Dea expects to achieve annual pre-tax cash synergies of at least €200 million by 2022.
Production 2020 by region
Proven reserves (2P) 2020 by region
In Germany, Wintershall Dea has been active in the exploration and production business for more than eight decades. Wintershall has now concentrated its production to the Mittelplate and Emlichheim oil fields and the Völkersen gas field. Production in Germany requires particular expertise, which the company can apply in its operations globally. The company’s operations in Mittelplate are considered exemplary and regarded internationally as a benchmark for safe oil production in an environmentally sensitive area. Concessions in the South of Germany and smaller participations in other licenses have been divested in the course of portfolio optimization measures.
Norway is Europe’s most important supplier of natural gas and oil besides Russia. Wintershall Dea has operated on the Norwegian continental shelf for more than 45 years and is now one of the leading oil and gas companies there. Wintershall Dea is operator of many of its approximately 100 concessions, such as for the producing fields Brage and Vega.
Wintershall Dea has been active in the Dutch North Sea for more than 50 years. As a shareholder of Wintershall Noordzee (50% Wintershall Dea, 50% Gazprom), the company is currently one of the major producers of natural gas in the region.
The southern North Sea plays a major role in Europe’s energy supply, as demonstrated by new projects. For example, the company commenced production as a shareholder of Wintershall Noordzee (50% Wintershall Dea, 50% Gazprom) at Ravn, its first self-operated oil field, in 2017. It has a stake in three other oil fields in Denmark and participates in a Carbon Capture and Storage (CCS) project in the Nini field, which is currently in the pilot phase.
Wintershall Dea holds six concessions off the British coast as a shareholder of the operator Wintershall Noordzee (50% Wintershall Dea, 50% Gazprom). The most important projects in the British North Sea are the self-operated natural gas field Wingate, discovered in 2008, and the Silliminate field, which is partly in the Dutch North Sea.
Russia is one of the world’s most resource-rich countries. It has the sixth-largest oil reserves and around one-fifth of all known natural gas reserves. The country is the most important supplier of gas to the E.U. Wintershall Dea is involved with Russian partners in exploring and producing hydrocarbons in Western Siberia. The joint projects are supplying energy to Europe. Wintershall Dea is involved in three onshore projects in Russia: The Urengoy field – one of the world’s largest gas and condensate reserves – is located some 3,500 kilometers northeast of Moscow, near the Western Siberian city of Novy Urengoy. There, the Achimgaz joint project produces natural gas from the technically complex Achimov Formation. Another joint venture, Achim Development, is developing blocks 4A and 5A and commissioning for commercial production has commenced. A little further south and also in the Yamalo-Nenets Autonomous Okrug is the Yuzhno-Russkoye field, in which Wintershall Dea has a stake via the Severneftegazprom joint venture.
Wintershall Dea has been active in Argentina for more than 40 years. Today, the company has a stake in 20 onshore and offshore fields. It acts as operator for three of them. Argentina has large amounts of conventional resources and is one of the most important growth regions in the area of unconventional shale resources.
Mexico has some of the world’s largest proven reserves. After entering the country’s oil and gas market in 2017, Wintershall Dea established a major position there in just one year. This includes being operator of the producing onshore Ogarrio oil field and partner in the offshore development Zama. The company also holds shares in promising exploration licenses.
Brazil is one of the most attractive growth regions for the oil and gas industry. The coastal region in particular, with its undeveloped offshore basins, is considered especially promising. Wintershall Dea aims to set up a resource base there in the next few years. In 2018 and 2019, the company secured a number of promising licenses. Initial exploration activities in the assigned blocks started in 2019.
Wintershall Dea has been active in Egypt for more than 40 years. Several oil fields in the Gulf of Suez have been developed – and production is now being stepped up again. The same holds true for gas production in the onshore Nile Delta, where Wintershall Dea was awarded a new exploration license in 2019. In both areas, the company is the operator. It is also a partner in the major West Nile Delta project, where five fields are now in production, most recently Raven, which started production in January 2021.
Through its affiliate Wintershall Aktiengesellschaft (WIAG), Wintershall Dea participates in crude oil production from nine oil fields across contract areas 91 (former concession 96) and 107 (former concession 97) in the Eastern Sirte Basin. After 54 years of own operatorship, WIAG in October 2020 handed over operatorship of contract areas 91 and 107 to Sarir Oil Operations, a joint venture between NOC (51%) and WIAG (49%) that has been established following the conversion of the former concession agreements to the EPSA IV contractual standard. Wintershall Dea also holds a minority stake in offshore oil production from Al-Jurf offshore platform in contract areas 15, 16 and 32 (former block C137).
Wintershall Dea is collaborating in Reggane Nord, a geologically and logistically challenging natural gas project in the Sahara.
United Arab Emirates
The United Arab Emirates have the seventh-largest oil reserves in the world. Wintershall Dea has operated there since 2010. In 2018, the national oil company ADNOC awarded it a 10% stake in the Ghasha concession. Ghasha is one of the most promising gas and condensate projects that has yet to be developed in the Emirates. The Ghasha concession offshore Abu Dhabi consists of several major gas and condensate development projects in different phases over the 40-year concession period.