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Norway's OKEA may launch IPO to help fund asset purchase from Shell

Norway's OKEA AS said Sept. 7 that it may launch an initial public offering in Oslo, as it works to complete its purchase of assets and oilfields from Royal Dutch Shell PLC.

As part of its massive plan to generate cash flow through divestitures, Shell affiliate A/S Norske Shell will sell its entire 44.56% interest in Draugen and 12% stake in Gjøa in Norway for $556 million.

Shell will retain 80% of the estimated $120 million after-tax decommissioning costs up to an agreed cap and OKEA will assume the remaining liability.

"The proceeds from the private placement will be used for working capital prior to closing of the Shell acquisition, including the continued expansion of OKEA's business through strategic and structural opportunities, transition costs related to the Shell acquisition and general corporate purposes," OKEA said.

Upon completion, OKEA will become the operator of Draugen. The deal is subject to regulatory approval and is expected to close in the fourth quarter.