Acquisition

Acquisition

Centrica PLC

29 December 2008

Centrica acquires further stake in North Sea gas development

Centrica plc, the parent company of British Gas, today announced it has reached agreement with Bow Valley Energy (BVX:CN) to acquire its 66.67% equity in the UK segment¹ of the Peik field, which straddles the UK Continental Shelf (UKCS) and Norway median line, for US$30 million (£20.4 million) in cash. The agreement, which is subject to pre-emption and approvals, would add to Centrica’s existing holdings in the Norwegian portion of the Peik field.

After further capital investment of around £140 million Centrica expects to recognise 72 billion cubic feet equivalent (bcfe) of gas and oil reserves, of which 78 per cent are gas. All of the gas is uncontracted and production is currently scheduled to start around the end of 2012. The profits from production will be subject to the normal UK tax rate for offshore gas production, currently 50%.

The increase in Centrica’s interest in the Peik field would build further on the company's position within the UK and Norwegian sectors of the North Sea. Centrica holds interests in over thirty producing, development or exploration stage assets in the UK sector and has interests in twelve exploration licences in the Norwegian sector.

Enquiries:

Centrica Investor Relations: [phone]

Centrica Media Relations: [phone]

Notes

1. Centrica is to acquire Bow Valley’s equity in block 9/15a of the UKCS North Sea
2. Centrica plc is making the acquisition through its subsidiary Centrica Resources Ltd 2. Centrica plc is making the acquisition through its subsidiary Centrica Resources Ltd