Analyst on the merger between the Norwegian and BP – OBI Online

On Friday morning it was announced that Kjell Inge Rokke The Norwegian oil company has agreed with BP Norway for a merger.

The new company will be named Aker BP, and will be owned 40 percent by Aker , 30 percent by BP and 30 percent of Det norske’s other shareholders.

Swedbank analyst Teodor Sveen Nilsen believes there are many advantages of the merger.

In a recent update he pulls out that the combination of the Norwegian and BP Norway reduces the overall capital costs significantly. He believes the combined company will be fully funded for Sverdrup in all likely (and unlikely) oil price scenarios, and points out that the agreement is extremely good for bondholders.

– The combined company will have a strong balance sheet and better access to financing new projects. Including cash flow from BP’s main shareholdings (Skarv, Valhall) the company will be fully funded for the development of Sverdrup in all oil scenarios. We have previously said that 40 dollars a barrel is a critical threshold, and the threshold is now below this level, writes analyst.

Sveen Nilsen writes that the combined company will most likely pay dividends from Q4 2016 is which probably will attract a wide range of investors.

– If the company decides to pay the maximum benefit, we envisage a yield potential of 0.4 million, 1.5 million and 4 per share in the years from 2016 to 2018, he points out.

the analyst also points out that the Norwegian, under Akers Capital Markets earlier this week, projected cash flow after tax of 5 billion. Swedbank’s first estimates suggest that this figure will be around 6 billion after the BP deal.

– The chief executives of BP, Aker and the Norwegian have all underlined their ambition to participate in countercyclical investments in Norway. In addition, BP has commented that the company has tried to sell its Norwegian assets separately. We assume that the newly formed Aker BP will attempt to obtain assets from other E & amp; P-fighter who looks around for a NCS exit (Conoco, Exxon?), Writes Sveen Nilsen.

Swedbank has a buy recommendation on the Norwegian, but believes the rate of well over 90 million is less attractive.

the Norwegian rising Friday morning 8.59 percent to 91.00 kroner on the Oslo stock Exchange. The stock has so far this year climbed 64.71 percent, while the last twelve months is up 71.37 percent.