Centrica To Raise North Sea Statfjord Field Interests To 34%

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
223MM
Description

To acquire 15.71% nonop WI in Stratfjord Field in North Sea, gaining 11,000 BOE/d, 36 MMBOE 2P.

Centrica Plc, Windsor, U.K., (London: CNA) parent company of British Gas, plans to acquire 15.17% nonoperated interest in Statfjord Field in the North Sea from ConocoPhillips, Houston, (NYSE: COP) for US$223 million (£142 million).

The deal price includes US$103 million (£66 million) attributable to historic tax allowances. Centrica is purchasing the U.K. piece of Statfjord from ConocoPhillips (UK) Ltd. and the Norwegian piece from ConocoPhillips Skandinavia AS.

The fields, which are across both the Norwegian and U.K. sectors of the Northern North Sea, produce gas for the U.K. market. The purchase strengthens Centrica’s integrated business model and provides gas for its U.K. customers.

Pro forma, Centrica’s overall stake in the field will be 34.3%. It will also see the company increase its interest in the Statfjord satellites (Statfjord Nord, Statfjord Øst and Sygna), all of which are producing fields tied back to Statfjord. Pro forma, Centrica’s interest in the three fields will be 23.12% in Statfjord Nord, 11.56% in Statfjord Øst and 12.71% in Sygna.

Net production from the acquired assets is 11,000 barrels of oil equivalent per day. Proved and probable reserves are 36 million barrels equivalent (60% liquids).

Statfjord Field is operated by Statoil AS (44.337%), with license partners Centrica (34.296% following completion of this acquisition) and ExxonMobil Corp. (21.367%).

Centrica managing director Mark Hanafin says, “Increasing our stake in Statfjord marks the latest stage in our drive to secure high quality sources of gas for our customers, adding both earnings and long-term value to Centrica. The acquisition, which follows our announcement last year of a new 10-year gas supply deal with Norway and acquisition of assets from Statoil, underlines our commitment to invest in North Sea production and secure future energy supplies for the U.K.”

The deal is expected to close in May.