Centrica Makes £142 Million North Sea Gas Deal with ConocoPhillips

British Gas parent Centrica has today announced that it has signed a £142 million deal with U.S. giant ConocoPhillips for ConocoPhillips interests in the Statfjord field in the Nowegian/UK sections of the North Sea.

The acquisition sees Centrica taking ConocoPhillips non-operated 15.7 percent interest in the field, which includes the gas producing Statfjord satellites, Statfjord Nord, Statfjord Øst and Synga. The acquisition increases Centrica's existing interests in the asset to 34.3 per cent.

The £142 million cash consideration includes £66 million attributable to historic tax allowances, Centrica said in a statement. The company will also invest a further £200 million in field development to maximise the long-term recoverable reserves from the fields. The statement says that Centrica expects strong immediate cash flow and earnings from the deal.

The company says the deal will ensure an approximate 9 per cent increase in gas reserves, providing an additional 36 million barrels of oil equivalent (mmboe), consisting of about 60 per cent liquids and 40 per cent gas. The increase equates to about 11,000 barrels of oil equivalent (boe) a day, with initial production expected to be weighted towards liquids, at least in the next few years.

Mark Hanafin, Managing Director of Centrica, said the deal strongly furthered Centrica's existing interests in the North Sea.

"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," he said.

"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 UK."