Centrica plc, the parent company of British Gas, has today completed its $1,525 million (£936 million) agreement with Statoil Petroleum AS to acquire a package of producing and development oil and gas assets in the Norwegian sector of the North Sea. An additional payment of up to $100 million (£61 million) is contingent on future production performance of the largest asset in the portfolio, Kvitebjørn.
The transaction was announced on 21 November 2011 and adds 117 million barrels of oil equivalent (mmboe) of 2P reserves to Centrica’s Norwegian portfolio as well as attractive development potential. It is expected to increase Centrica’s production by 34,000 boe per day (12 mmboe per annum), strengthening the Company’s energy hedge and extending its production profile.
The Company has today also completed its acquisition of ConocoPhillips’ non-operated interests in the gas and oil producing Statfjord field and associated satellites. The $223 million (£137 million) transaction, announced on 30 January 2012, includes $103 million (£63 million) attributable to historic tax allowances and takes Centrica’s equity in the Statfjord field to 34.3%, adding 36 mmboe of 2P reserves.
Combined, the transactions increase reserves by nearly 40% and are expected to increase production by over 30%.
Commenting on the completion, Mark Hanafin, Managing Director of Centrica Energy, said: “These acquisitions mark an important step in Centrica’s strategy to grow its upstream business. As well as being one of the top three gas producers in the UK, we have one of the fastest growing companies in Norway, with around a third of our gas and oil production now coming from the region”.
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- Centrica Energy in Norway, Centrica Energi, is a growing business. Headquartered in Stavanger, it is investing in operated and non-operated assets in the North Sea, Haltenbanken and Norwegian Sea. It acquired its first license in 2007 and has continued to grow through a combination of acquisitions and exploration activities. The business has demonstrated a strong exploration performance with a higher than average exploration success rate (5 successful appraisal and exploration wells from a total of 7 drilled).
- The transactions have an effective date of 1 January 2012, with the final cash consideration adjusted to reflect the date of completion.