courtesy Aker Exploration

Norway-based oil companies Det norske oljeselskap and Aker Exploration have penned a deal to merge the two companies into “the second biggest company by far on the Norwegian continental shelf” — acreage-wise.

The new company will be worth 4.17 billion kroner ($690.5 million) in the market.

Norwegian industrial magnate Kjell Inge Røkke will be chairman of the new Det norske oljeselskap, while outspoken Erik Haugane will be its chief executive officer.

An agreed stock-conversion ratio gives Det norske shareholders 82 percent of the merged company, although Aker ASA — Røkke’s holding company — will be the largest shareholder with around 30 percent of all shares in-line with already owned stakes in both companies.

Rapid growth has characterized both companies in recent years, with Det Norske first owning then selling it stake in the big arctic oil field project, Goliat. Aker Exploration could, when rigs were scarce, also boast ready access to Aker-built rigs.

But the kind of production that spells growth has eluded both companies, although both have built up large licence portfolios offshore Norway.

The merger creates an offshore operator of 32 licences and holder of 70 licences. The acreage contains seven discoveries and four producing fields.

Aker Exploration boss Bård Johansen said the deal means a better pick of prospects.

“The merger will also mean that Aker Exploration's shareholders will own a more liquid share,” he was quoted as saying. The combined leadership gave an account of their merger plans in Oslo early on Tuesday.

It’s not clear what role Johansen will have in a merged company. Shareholders meeting in September and October 2009 will likely decide the matter, but the biggest of those are Aker and DNO International, both of which have agreed terms.

Tags: Aker Exploration, Det norske oljeselskap