Centrica, QPI to buy Suncor gas properties

A joint venture of Centrica PLC and Qatar Petroleum International (QPI) has agreed to acquire the conventional part of Suncor Energy’s natural gas business in western Canada for $1 billion (Can.).

Centrica estimates production covered by the agreement at 250 MMcfd of natural gas equivalent, 90% gas. It estimates proved plus probable gas-equivalent reserves at 978 bcf.

The properties are in Alberta, northeastern British Columbia, and southern Saskatchewan.

Not covered are most of Suncor’s unconventional gas properties in the Montney region of British Columbia or its Wilson Creek unconventional oil assets in Alberta.

Steve Williams, Suncor president and chief executive, said the agreement reflects “commitment to capital discipline and aligning assets with strategic objectives.”

For the buyers, the agreement, if approved by government agencies, would be the first investment under a memorandum of understanding signed in December 2011.

Centrica holds a 60% share of the partnership and is operator. QPI holds the rest.

The assets to be acquired in central and southern Alberta overlap existing Centrica acreage.

The package includes more than 1 million acres of undeveloped land for which Centrica sees potential for horizontal drilling and multistage fracturing.

Centrica estimates contingent resources of the acquisition properties at more than 3 tcf of gas equivalent.

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