Centrica increases stake in UK gas fields

Centrica will pay $70 million to Sojitz Energy Project for a 50% equity stake in Grove field, Seven Seas development, the Sloop gas discovery, and associated exploration acreage in the UK North Sea.

Feb. 15, 2008

Uchenna Izundu
International Editor

LONDON, Feb. 15 -- Centrica PLC will pay $70 million to Sojitz Energy Project Ltd. for a 50% equity stake in Grove field, Seven Seas development, the Sloop gas discovery, and associated exploration acreage in the UK North Sea.

The deal will increase Centrica's gas reserves by 32 bcf over the next 3 years. Its stake will increase to 92.5% in Grove and 90% in Seven Seas, Sloop, and other blocks. This latest acquisition builds on the 300 bcf of reserves secured through the acquisition of Newfield UK last fall, Centrica said (OGJ Online, Sept. 21, 2007). Centrica is operator of the fields.

Since the acquisition of Newfield UK, Centrica has seen higher-than-expected production from Grove field, which initially had some problems during its start-up. The addition of offshore compression facilities and another well in late 2008 are expected to more than double its production rate.

The transaction will require approval by third parties before it can be closed.

Contact Uchenna Izundu at [email protected].