DONG Energy, 58.8% owned by the Danish government, intends to divest its exploration and production business in an initial public offering (IPO) and focus investment on wind power and other renewable energy.
The company said last September it planned an IPO within 18 months and divest its gas distribution business and oil and gas pipelines to the Danish electricity and gas transmission company Energinet.dk. It began a strategic review of E&P assets at that time.
DONG holds interests in 66 licenses off Denmark, Norway, the UK, and the Faroe Islands. Production in the first 9 months of 2015 totaled 39.3 million boe of oil and gas, down 5% from the comparable period of 2014, from fields off Denmark and Norway.
The Danish state will remain DONG’s majority shareholder after the IPO.
The company will write down E&P assets in 2015 financial reports by the krone equivalent of $2.32 billion to account for falling oil and gas prices, diminished reserves estimates, and operational problems.
“With this revision of DONG Energy’s portfolio strategy, investments to support future growth will be focused on renewable energy,” the company said in a statement.