Centrica Acquires UK North Sea Assets from Total

British Gas parent Centrica has announced that it has reached an agreement with Total E&P UK to acquire the company's non-operated assets in the UK North Sea. 

The acquisition will see Centrica take Total's shares in seven producing fields, including the Greater Armada field, the Alba field and the Mungo and Monan cluster. Centrica takes the assests at a cost of £246 million, with 20 per cent of that total cash consideration allocated to UK tax allowances.

Centrica expects to increase its reserves by 5 per cent, with a production rate of 9,300 barrels of oil equivalent a day in 2012. Centrica says its share in these fields amounts to 22 million barrels of oil equivalent, 36 per cent of that gas with the remaining 64 per cent oil.

"Today’s announcement marks another step in the growth of our upstream oil and gas business," Mark Hanafin, Managing Director of Centrica Energy said. "This acquisition in the North Sea provides a good fit with our existing portfolio and strategy, bringing strong cash flow and adding value for Centrica. It underlines our commitment to invest where we see attractive opportunities, securing future energy supplies for the UK."

Centrica says it expects that the acquisition will add immediate strong cash flow to the company and increase its assets in the Central North Sea. It will also increase the oil assets in its upstream portfolio.