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Danish energy company turns the page on gas and oil

By Karen Graham     Sep 1, 2017 in Business
DONG Energy AS, Denmark's majority state-owned energy company, is selling off its last oil and natural-gas fields in a deal expected to close this month or next. Goldman Sachs has agreed to sell 7.5 million shares in the energy group to investors.
Denmark-based DONG Energy is further along in its transition from being one of Europe's most coal-exposed utilities to becoming a global leader in offshore wind power. With the sell-off of its last oil and natural-gas fields, the billion-dollar-plus deal will further cement the company's larger plan to move away from fossil fuels and concentrate on renewables.
Over the past few years, DONG has received a sizable amount of cash from Goldman Sachs Group, Inc. On Thursday, they announced they were reducing their stake in DONG Energy, agreeing to sell 7.5 million existing shares of the energy group in an accelerated bookbuild offering to institutional investors.
According to Market Watch, the shares are being sold at 321 Danish kroner ($51.34) each through Goldman Sachs-controlled New Energy Investment. Following the deal, New Energy Investment will hold 11,435,215 shares or 2.7 percent of DONG Energy's existing shares.
Dong Energy
Back in June 2016, DONG's listing at the time was Europe's biggest initial public offering, with the company valued at $15 billion. At that time, New Energy Investment held a 13.4 percent stake in the energy company.
On August 10, Henrik Poulsen, the CEO of DONG Energy spoke with CNBC. Poulsen talked about the first quarter operating profit (earnings before interest, tax, depreciation, and amortization) increasing from DKK 1.8 billion ($283 million), to DKK 4.4 billion in the second quarter of 2017.
"We've had a very strong first half, Q1 was slightly below expectations but it was all a matter of timing across the quarters," he said. "And here, in (the) second quarter, we've had 70 percent EBITDA growth. So for the full first half year, we've had a very strong first half year of '17."
Poulsen also pointed to the decrease in the cost of renewable technologies over the past several years, something that has been seen across the board, from solar to wind, in particular. "I do believe what we've seen – especially over the last couple of years – is we've seen renewable technologies coming down very rapidly in price," he said.
DONG's transition to a focus on renewables comes at a time when global oil and gas companies are wrestling with the possibility of the world demand for fossil fuels reaching a point where renewables overtake energy demands in our quest to contain climate change.
Companies like Royal Dutch Shell PLC, Norway's Statoil ASA, and France's Total SA are quietly building up their renewables portfolios, sinking billions into research and development of technologies that our energy future will rely on, instead of fossil fuels.
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