Acquisition of Upstream Gas A

RNS Number : 0563N

Scottish & Southern Energy PLC

04 June 2010

 



SCOTTISH AND SOUTHERN ENERGY PLC

ACQUISITION OF UPSTREAM GAS ASSETS

Rights of pre-emption associated with the North Sea natural gas and infrastructure assets which SSE (Scottish and Southern Energy plc) agreed on 1 April 2010 to acquire from Hess Limited have now been exercised or expired. 

Following this, almost 80% of the resources from the original package of around 383billion cubic feet (bcf) are available for SSE to acquire at an equivalent value as indicated in April. Gas production from these assets is forecast to be in excess of 200Mth (million therms) in 2010, rising to about 300Mth in 2012, which will provide approximately 6% of SSE's needs.  A revised cash consideration of $324million will be paid for these assets subject to further partner and regulatory approvals before completion later this year.

The assets subjected to pre-emption were primarily Everest, Lomond, Neptune and the CATS pipeline.

Alistair Phillips-Davies, Energy Supply Director of SSE, said:

"It was to be expected that some of Hess' existing partners would exercise their pre-emption rights, but we are very pleased with the assets which we can now go ahead and acquire.  For a fair price, we will secure a new source of primary fuel and a hedge for our gas generation and supply activities, taking a very useful first step into the upstream gas sector."

 

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