Statoil to Buy Brigham Exploration in $4.4B Deal

Norwegian state-controlled oil giant Statoil (NYSE:STO) said it has offered to buy Brigham Exploration’s (NASDAQ:BEXP) outstanding shares for about $4.4 billion in an effort to significantly grow its acreage in the Williston Basin.

Under the terms of the deal, Statoil would acquire the U.S.-based oil company’s shares for $36.50 each in an all-cash tender offer slated to begin on Oct. 31. The transaction values Brigham at about $4.4 billion, the companies said.

The Brigham board has unanimously approved the transaction and recommended shareholders do the same. The Austin, Texas-based company’s chief and other executive officers and directors who together own about 2.5% of the shares have agreed to tender all of their shares.

The company, which employees more than 100 workers in Austin and North Dakota, with a strong position in the Bakken and Three Forks oil plays in the Williston Basin in North Dakota and Montana, would be vital to Statoil's expansion in the U.S.

Statoil CEO Helge Lund said: “Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil.”

With the transaction, Statoil would get more than 375,000 net acres in the Williston Basin as well as interests in 40,000 acres in other areas. The risked resource base is estimated at between 300 million and 500 million barrels of oil equivalent.

Current equity production is about 21,000 barrels a day, and the acreage has potential to ramp up to 60,000 or 100,000 barrels a day over the next five years, Statoil said. Also with the buy, Statoil would get about 430 miles of oil, natural gas and water transportation systems centrally located in the Williston Basin.

The deal remains subject to a majority of Brigham shares tendered as well as antitrust approvals and other customary closing conditions. The transaction is slated to close at the end of 2012’s first quarter.