Centrica announces further offshore agreements

Centrica has today announced two deals to acquire offshore gas assets through its subsidiaries Centrica Resources Limited and Hydrocarbon Resources Limited.

A conditional agreement has been entered into to purchase from Dana Petroleum plc a 5 per cent interest in the Victor gas field and a 10.5 per cent interest in the UK offshore blocks 110/3b and 110/3c which are close to Centrica's Morecambe gas fields. In addition Centrica has renegotiated its take or pay contract with Dana for the gas from the 10 per cent interest Dana still retains in the Victor field. Centrica will make a compensation payment to Dana in return for the contract changes.

Conditional agreement has also been reached with British Borneo to purchase its 10 per cent interest in the Victor field and its 24 per cent interest in block 49/4 containing the Chiswick undeveloped gas field.

These assets bring around 50 bcf (0.5 bn therms) to Centrica's portfolio.

Jake Ulrich, Managing Director of Centrica's Energy Management Group said:

"These acquisitions are in line with our intention of securing upstream assets which provide a good fit with existing assets and our current contracted gas supply portfolio. In addition the gas contract renegotiation with Dana brings benefits to both of us and we will continue to look for further opportunities with other suppliers."

The total cost to Centrica of the asset purchases and contract renegotiations represents approximately 3 per cent of Centrica's net assets. The acquisitions are conditional on DTI consent and the pre-emption rights of the field partners.

Centrica has now renegotiated on either price or volume a combined total of 49.5 bn therms since December 1996.