Centrica plc today announced it has reached agreement with Tullow Oil plc to acquire Hawkeye Exploration Limited, which owns a 50 per cent interest in the undeveloped Horne and Wren gas fields in the Southern North Sea. The acquisition is expected to add approximately 230 million therms to Centrica’s equity gas portfolio. Following development of the fields, first gas is scheduled for summer 2005, with the reserves being extracted over a two year period.
Centrica will make an anticipated payment of £7.1 million, of which £4.6 million will be paid immediately. Its share of the development cost is estimated at £24 million.
This acquisition will also benefit Centrica through tariff income received via its interests in the Thames field (10 per cent) and the Hewett Bacton terminal (23.15 per cent) through which gas from Horne and Wren will be transported. Development of the fields started in June this year.
Jake Ulrich, Managing Director of Centrica Energy, said: "This acquisition is further evidence of our investment in upstream gas and power assets to secure energy supplies for our British Gas customers.
"The agreement fits with our strategy of acquiring producing or development stage assets that bring uncontracted gas to our portfolio. Centrica will also benefit by receiving tariff income through our interests in the infrastructure that will transport gas from Horne and Wren."