LetterOne and BASF merge oil and gas units to create Wintershall Dea

LetterOne and BASF have completed the previously announced merger of their oil and gas businesses to create a new independent exploration and production company in Europe known as Wintershall Dea.

The development comes after the companies received all necessary regulatory approvals from nine countries, including Germany, Norway, the UK and Russia.

BASF signed a definitive combination agreement last September to merge its Wintershall oil and gas business with global investment firm LetterOne’s DEA.

With activity spanning 13 countries across Europe, Latin America, North Africa and the Middle East, Wintershall Dea will be managed by an executive board comprising five members.

BASF board of executive directors vice-chairman Dr Hans-Ulrich Engel said: “With Wintershall Dea, we create the leading independent European exploration and production company with international operations in core regions.

“By combining the two German-based entities, BASF and LetterOne lay the basis for strong profitable growth for Wintershall Dea.”

Wintershall and DEA would have produced 590,000 barrels of oil equivalent per day (boe/d) and reported sales of €5.7bn last year.

The combined entity’s reserves stood at 2.4 billion barrels of oil equivalent on a proven (1P) reserves basis.

Based on its existing project pipeline, Wintershall Dea is on track to increase production to between 750,000boe/d and 800,000boe/d between 2021 and 2023.

Upon formal registration of the corresponding capital increase, BASF will hold 67% of Wintershall Dea’s ordinary shares. LetterOne will hold the remaining 33%.

BASF said that its oil and gas business was classified as a discontinued operation during the period between the signing of the business combination agreement and the closing of the merger.