Centrica to Sell Spirit Energy's Oil & Gas Assets in Norway -- Update

By Jaime Llinares Taboada

Centrica PLC said Wednesday that it has agreed to the sale of Spirit Energy's oil-and-gas assets in Norway to Equinor ASA and Sval Energi AS for $1.08 billion.

Centrica, which owns 69% of Spirit Energy, said that the deal will also include a deferred commodity price-linked payment, and that the buyers will be transferred all 830 million pounds ($1.10 million) of decommissioning liabilities. The share of headline proceeds for Centrica is expected to be around GBP560 million.

The assets sold represent 52% of Spirit Energy's production in 2020 and 63% of total proven and probable reserves. In the first half of 2021, Spirit Energy contributed GBP104 million to Centrica's adjusted operating profit of GBP262 million.

Centrica, which also owns British Gas, said that the sale further simplifies and de-risks its business model while strengthening the balance sheet and reducing earnings and cashflow volatility.

"We are pleased to continue to bring focus to Centrica's portfolio with these transactions, which are aligned with our strategy to reduce our exposure to carbon-intensive oil-and-gas exploration and production in a way that maximizes shareholder value," Centrica's Chief Executive Chris O'Shea said.

The company added that Spirit Energy's future strategy will be to realize value from its remaining portfolio in the U.K. and the Netherlands, while minimizing further investment in oil-and-gas exploration and development.

The deal is expected to be completed in the second quarter of 2022.

Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT

(END) Dow Jones Newswires

December 08, 2021 03:21 ET (08:21 GMT)

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