LONDON, Dec. 31 -- Centrica PLC has agreed to pay Bow Valley Energy Ltd. $30 million in cash for its 66.67% interest in Peik natural gas-condensate field in the UK North Sea. The deal adds to Centrica's existing stake in the Norwegian portion.
Peik, which straddles the UK-Norwegian trans-median boundary, is on Block 9/15a.
Centrica will invest £202 million in Peik to acquire 72 bcfe of gas and oil reserves, of which 78% are gas. "All of the gas is uncontracted, and production is currently scheduled to start around the end of 2012," Centrica said. "The profits from production will be subject to the normal UK tax rate for offshore gas production, currently 50%."
Bow Valley, which had a deadline of Dec. 31 to repay bank debt, will use the sale proceeds to reduce the debt and for general working capital purposes. It also is exploring other alternatives to raise money, including potential asset divestments, equity alternatives, strategic alliances, joint venture opportunities, mergers, or a corporate sale transaction.
The sale of Peik requires regulatory approval, a third party pre-emption right, and consent of the company's UK bank lending group.
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