Centrica has reached an agreement with Hess to acquire a 67 per cent interest in the undeveloped York gas fields in the southern North Sea for £22m in cash.
Centrica has reached an agreement with Hess to acquire a 67 per cent interest in the undeveloped York gas fields in the southern sector of the North Sea for £22m in cash.
The acquisition adds to the 23 per cent of the development acquired as part of the Rough gas storage acquisition in 2003, and takes Centrica’s interest in the fields to 90 per cent.
The York gas development represents the largest known undeveloped gas reserve in the southern sector of the North Sea. After further capital investment of around £220m, Centrica expects to recognise 107 billion cubic feet (bcf) of reserves from its enlarged stake in the field, of which 79bcf are directly attributable to this acquisition.
Sam Laidlaw, chief executive of Centrica, said: ‘This investment is in line with our strategic priority to reduce the group’s exposure to movements in gas prices through securing additional upstream assets. It also increases the level of gas reserves to supply our British Gas customers and builds on our existing portfolio of producing and exploration prospects.
‘This deal underlines our commitment to invest in new energy supplies from the North Sea at a time when existing North Sea production is in decline.’
fields, situated adjacent to the Rough gas storage reservoir, comprise the main south reservoir and a separate east reservoir. The first gas flows are expected as early as 2011, and Centrica said it plans to export production via its Easington terminal.