Centrica, Bayerngas Norge to Create E&P Joint Venture

By Razak Musah Baba

LONDON--Centrica PLC (CNA.LN) and Stadtwerke Muenchen GmbH said Monday they have agreed to combine Centrica's European oil and gas exploration and production business with Bayerngas Norge AS to form a newly incorporated joint venture.

Energy services group Centrica said it will contribute the whole of its European exploration and production, or E&P, business and make a series of deferred payments totaling 340 million pounds ($437.9 million), post tax, to the joint venture between 2017 and 2022, in exchange for a 69% share in the joint venture.

Bayerngas Norge's existing shareholders, led by Stadtwerked Muenchen, known as SWM, and Bayerngas GmbH, will own 31%. Bayerngas is SWM's upstream E&P vehicle.

The transaction is expected to close in the fourth quarter of 2017, subject to competition and regulatory approvals and other conditions.

Centrica said the joint venture will create one of North-West Europe's largest independent E&P companies. It is expected to create GBP100 million to GBP150 million of net present value through synergies from cost savings and portfolio optimization.

Write to Razak Musah Baba at [e-mail]; Twitter: @Raztweet

(END) Dow Jones Newswires

July 17, 2017 02:52 ET (06:52 GMT)

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