Norwegian oil and gas operator DNO has entered into an offtake agreement with France’s Engie for its Norwegian gas production and secured a related offtake financing facility with a major U.S. bank for up to $500 million.
The offtake agreement, secured through DNO’s Norway operating subsidiaries, covers the entirety of its Norwegian gas production post acquisition of Sval Energi, offers premium pricing and has a tenor of four years as from October 1, 2025.
Related to the agreement, DNO has entered into an offtake financing facility with a U.S. bank for up to $500 million.
Under the facility, DNO is paid, by the bank, the value of up to 270 days of scheduled gas production based on future gas sales receivables.
The all-in interest rate for drawn amounts under the facility is significantly below conventional reserve-based lending (RBL) terms available to DNO, with no charges for undrawn amounts. There are no financial covenants related to the facility.
Proceeds from the offtake financing facility will be used to replace Sval Energi’s similar existing facilities as well as for general corporate purposes.
In June, DNO completed the acquisition of Sval Energi from HitecVision, picking up 16 producing fields in Norway and quadrupling its North Sea production to 80,000 barrels of oil equivalent per day (boepd).
“We have received strong interest by buyers to prepurchase our enlarged North Sea production of 80,000 barrels of oil equivalent per day split about equally between oil and gas.
“These three-way transactions are made possible because buyers are eager to lock in secure supplies of Norwegian oil and gas and US banks, in particular, have significantly stepped up fossil fuel lending,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani.
Given availability of attractive offtake financing terms, DNO has repaid and will not renew over $600 million in RBLs across its North Sea subsidiaries. In addition, the company has borrowed #300 million under a one-year bank bridge loan ‘to add more arrows to its quiver’, according to Mossavar-Rahmani.
Separately, DNO said it was in discussions to establish an offtake agreement and related financing facility on comparable terms for its North Sea oil production.
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