Centrica plc announced today that it has agreed to buy Avalanche Energy Limited, a privately-held Canadian gas and oil production company. The total consideration, including the assumption of debt, is C$253.5m (£114.5m). The acquisition, which will be made by way of an offer to Avalanche Energy shareholders by a wholly owned subsidiary of Centrica plc, has the unanimous support of the Avalanche Energy board of Directors. The offer will be subject to the approval of Avalanche Energy shareholders and regulatory authorities.
The agreement to acquire Avalanche Energy follows Centrica's acquisition of Direct Energy Marketing Limited in August this year, and will provide additional reserves to support a reliable and competitively priced gas supply to its growing customer base in Canada.
The key Avalanche Energy assets are the Entice, Hackett and Bashaw gas fields in South Central Alberta. These assets compliment Direct Energy's existing production which is from similar, nearby gasfields. Avalanche Energy has shallow gas reserves which are largely uncontracted and land holdings with significant potential for future exploitation drilling.
It is expected that the offer will be posted to shareholders within seven days and will be completed by the end of November 2000.
Roy Gardner, Chief Executive, of Centrica said; "This is an important step towards our longer term goals in North America, and will consolidate Direct Energy's ability to serve both existing and future customers through a combination of value, reliability and excellent service."