Acquisition

Acquisition

Centrica PLC

Centrica acquires portfolio of UK North Sea assets

Centrica plc, the parent company of British Gas, has reached an agreement with Total E&P UK Limited (and its affiliates) to acquire their non-operated portfolio of producing oil and gas assets and associated infrastructure in the Central North Sea (CNS) for a total cash consideration of $388 million (£246 million). Around 20% of the consideration is allocated to UK tax allowances.

The portfolio includes seven producing fields in three major areas: Greater Armada, the Alba field and the Mungo and Monan cluster. Centrica’s share in these fields has an estimated 22 million barrels of oil equivalent (mmboe) of 2P reserves (36% gas, 64% oil), increasing its reserves by approximately 5%, and is expected to produce 9,300 boe per day in 2012. The oil and gas is mostly un-contracted and linked directly to the UK market.

The acquisition is expected to add immediate strong cash flow and increase Centrica’s scale in the CNS region. The transaction will also help to maintain the mix of oil in its upstream portfolio.

Mark Hanafin, Managing Director of Centrica Energy, said:

“Today’s announcement marks another step in the growth of our upstream oil and gas business. 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.”

Asset acquisition details

Producing assets	Â	Equity acquired	Â	Centrica’s equity on completion	Â	Operator
Greater Armada	Â	Â	Â	Â	Â	Â
- Maria	Â	28.9600%	Â	64.0000%	Â	BG Group
- Seymour	Â	25.0000%	Â	43.0000%	Â	BG Group
- Armada Unit	Â	12.5300%	Â	23.5800%	Â	BG Group
- Everest	Â	0.8688%	Â	0.8688%	Â	BG Group
Alba	Â	12.6500%	Â	12.6500%	Â	Chevron
Mungo and Monan	Â	12.4342%	Â	12.4342%	Â	BP
Â	Â	Â	Â	Â	Â	Â
Infrastructure	Â	Â	Â	Â	Â	Â
ETAP Central Processing Facility (CPF)	Â	3.3760%	Â	3.3760%	Â	BP
Central Area Transmission System (CATS)	Â	0.5684%	Â	0.5684%	Â	BP

ENDS

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Notes:

1. Based on reported Centrica Energy 2P 2010 year end reserves, which excludes gas in the Rough storage facility, North American reserves, and reserves from the acquisition of assets from Statoil announced in November 2011.

2. The agreement is subject to UK Government approval and other closing conditions, including various pre-emption rights that may or may not be exercised by Total’s existing joint venture partners. The effective date for the transaction is 1 July 2011 and the transaction is expected to close on a field by field basis. The earliest closing date expected to be around July 2012.

3. The Centrica entity which is purchasing the assets is Centrica Resources Limited and the Total selling entities are Fina Petroleum Development Limited, Fina Exploration Limited and Total E&P UK Limited.

4. The Armada Unit is operated by BG Group (76.42%), with current partners Total (12.53%) and Centrica (11.05%).

5. The Maria field is operated by BG Group (36.00%) with current partners Centrica (35.04%) and Total (28.96%).

6. The Seymour field is operated by BG Group (57.00%), with current partners Total (25.00%) and Centrica (18.00%).

7. The Everest field is operated by BG Group (99.1312%), with current partners Total (0.8688%).

8. The Alba field is operated by Chevron (23.336665%), with current partners ConocoPhillips (23.43335%), Statoil (17.00%), BP (13.30%), Total (12.65%), CIECO Energy (8.00%) and Endeavour Energy (2.25%).

9. The Mungo and Monan cluster is operated by BP (69.9207%) with current partners Murphy (12.6461%), Total (12.4342%), and JX Nippon (5.00%).

10. In November 2011 Centrica signed a £13 billion gas supply deal for the UK with Norway and announced the £1bn acquisition of producing and development assets from Statoil in the Norwegian North Sea. In January 2012 Centrica announced the acquisition of a further stake in the Statfjord field in Norway. When combined with the acquisition of this package of assets in the CNS, announced today, these three transactions will represent an increase of nearly 45% in reserves and approximately 40% in production.

11. British Gas is the UK’s leading energy supplier with around 16 million customer accounts.