Norway’s oil and gas operator DNO has got its hands on an offtake agreement with France’s ENGIE for its Norwegian gas production and a related offtake financing facility with a U.S. bank.
This North Sea gas offtake deal, which the operator’s wholly-owned subsidiaries secured with ENGIE, is said to cover the entirety of the oil and gas player’s Norwegian gas production post-acquisition of Sval Energi, offering premium pricing with a tenor of four years as from October 1, 2025.
DNO also secured a related offtake financing facility for up to $500 million with what it describes as a major U.S. bank, which enables it to be paid the value of up to 270 days of scheduled gas production by the bank based on future gas sales receivables.
Bijan Mossavar-Rahmani , DNO’s Executive Chairman, commented: “We have received strong interest by buyers to prepurchase our enlarged North Sea production of 80,000 barrels of oil equivalent per day split about equally between oil and gas.
“These three-way transactions are made possible because buyers are eager to lock in secure supplies of Norwegian oil and gas and US banks, in particular, have significantly stepped up fossil fuel lending.”
According to the North Sea operator, the all-in interest rate for drawn amounts under the facility is significantly lower than conventional reserve-based lending (RBL) terms available to the firm, with no charges for undrawn amounts and no financial covenants related to the facility.
DNO claims that the proceeds from the offtake financing facility will be used to replace Sval Energi’s similar existing facilities as well as for general corporate purposes.
The company explains that it has repaid and will not renew over $600 million in RBLs across its North Sea subsidiaries, thanks to the availability of attractive offtake financing terms.
The Norwegian firm also borrowed $300 million under a one-year bank bridge loan “to add more arrows to our quiver,” as noted by Mossavar-Rahmani.
Currently, DNO is in discussions to establish an offtake agreement and related financing facility on comparable terms for its North Sea oil production.
The Norwegian operator is actively searching for more hydrocarbons to boost its arsenal, as illustrated by an oil and gas discovery it recently made in the Northern North Sea.