Equinor sells Martin Linge and Ekofisk stakes to Sval for US$1 bn

Equinor has sold a 19% stake in the Martin Linge Unit plus its entire holding in the Greater Ekofisk Area to HitecVision-backed Sval Energi for US$1 billion, plus contingent payments linked to realised oil and gas prices in 2022 and 2023. Included in the Greater Ekofisk Area are 7.6% interests in licenses PL018, PL018B and PL275, containing Ekofisk, Eldfisk and Embla fields; 6.6% in the Tor Unit; and an 18.5% holding in the Norpipe oil pipeline. The majority of value is associated with Martin Linge, which under current prices and production output is generating significant cashflow. Further upside at Martin Linge may be realised through additional drilling at the field utilising the spare well slots at the platform. Despite this, gas production has struggled to ramp up in 2022 and a near-term underperformance in production would provide downside from our current valuation. For Equinor, this deal signifies portfolio optimisation and positioning for the longer term.