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17 September 2007
Centrica plc, the owner of British Gas, today announced the purchase of the entire share capital of Newfield UK Holdings Limited, the UK subsidiary of Newfield Exploration Company, for $486.4 million (£242 million) in cash. The price is subject to certain adjustments based on working capital and indebtedness.
Centrica will take an 85 per cent operated interest in the Grove gas field which started production in summer 2007, an 80 per cent interest in the Seven Seas gas development, the Sloop gas discovery and associated exploration acreage.
Sam Laidlaw, Chief Executive of Centrica, said: “This important investment to acquire Newfield UK is in line with our strategy of increasing our level of gas reserves to supply our British Gas and European customers. As a result of the acquisition, we expect to add net gas reserves of up to 300 billion cubic feet of gas over the next three years, equivalent to more than a fifth of Centrica’s current UK gas reserves.
“We will also benefit through equity gas being delivered into continental Europe, close to our main customer base in Holland and Belgium. The acquisition also brings organisational capability and helps build our competitive advantage through the experience of operating development-stage gas fields.”
Centrica Investor Relations: 01753 494900
Centrica Media Relations: 0845 072 8001
1/ Grove has been developed with a normally unmanned platform exporting gas via pipeline to the Venture operated Markham field and then to Den Helder in the Netherlands. Centrica’s partner in the field is Sojitz, a Japanese conglomerate, with 15 per cent interest. Seven Seas is a development prospect which Centrica will operate with an 80 per cent interest, with Sojitz holding 20 per cent. First production is anticipated around 2010. Exploration acreage includes interests in six licences within the Southern North Sea
2/ It is currently estimated that additional capital expenditure of around £150 million will be required to realise the full gas reserves potential.
3/ The seller is Newfield International Holdings Inc. The purchaser is GB Gas Holdings Limited, a subsidiary of Centrica plc.