Centrica plc, the parent company of British Gas, today announced it has reached agreement with Bow Valley Energy (BVX:CN) to acquire its 66.67% equity in the UK segment1 of the Peik field, which straddles the UK Continental Shelf (UKCS) and Norway median line, for US$30 million (£20.4 million) in cash. The agreement, which is subject to pre-emption and approvals, would add to Centrica's existing holdings in the Norwegian portion of the Peik field.
After further capital investment of around £140 million Centrica expects to recognise 72 billion cubic feet equivalent (bcfe) of gas and oil reserves, of which 78 per cent are gas. All of the gas is uncontracted and production is currently scheduled to start around the end of 2012. The profits from production will be subject to the normal UK tax rate for offshore gas production, currently 50%.
The increase in Centrica's interest in the Peik field would build further on the company's position within the UK and Norwegian sectors of the North Sea. Centrica holds interests in over thirty producing, development or exploration stage assets in the UK sector and has interests in twelve exploration licences in the Norwegian sector.