L1 acquires RWE Dea for US$7.1 billion Report

Deal Insight 26 March 2014

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Report summary

LetterOne AG, the investment vehicle founded with the proceeds of Alpha Group's exit from TNK-BP, has acquired RWE Dea for US$7.1 billion. We value the business at US$6.7 billion (NPV10, assuming a March 2014 effective date), of which Germany, the UK and Norway account for 80%. These countries provide dependable, high margin cash flow, plus a handful of mid-term development opportunities. North Africa is potentially the most important growth region in the portfolio, but operations are ...

Executive summary
Transaction details
Upstream assets
- Germany
- Norway
- UK
- Libya
- Egypt
- Algeria
- Denmark
- Netherlands
Deal analysis
Upsides and risks
- Upsides
  - North Alexandria (Egypt)
  - Exploration
- Risks
  - Libya development
  - UK development
  - Norway development
  - Denmark/Netherlands decommissioning
  - Algeria development
Strategic rationale
- LetterOne
- RWE
- Implications for the utilities market
Oil & gas pricing and assumptions

Tables and charts

This report includes 11 images and tables including:

Executive summary: Table 1
Upstream assets: Table 1
Deal analysis: Table 1

Deal analysis: Table 2
Deal analysis: Table 3
Oil & gas pricing and assumptions: Table 1
Oil & gas pricing and assumptions: Table 2
Upstream assets: Table 2
Wood Mackenzie forecast for RWE Dea production (including North Alexandria upside)
Strategic rationale: Table 1
North Alexandria valuation sensitivities (NPV10)