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Centrica plc is an integrated energy company operating predominately in United Kingdom and North America. In the United Kingdom, it operates three segments: upstream, downstream and storage.
Centrica to buy Canadian gas assets from Suncor for C$375 mlnAugust 12 2010, 7:38am
Centrica PLC (LON:CNA) said its North American subsidiary, Direct Energy, has reached an agreement with Suncor Energy (TSX: SU, NYSE: SU), to acquire its natural gas assets in the Wildcat Hills region of Alberta for C$375 million in cash.
This acquisition will provide Direct Energy with 241 billion cubic feet equivalent (bcfe) of additional natural gas reserves, an increase of approximately 60 percent, and an incremental 80 million cubic feet per day (mmcfe) of natural gas production.
This will enable Direct Energy to achieve significant economies of scale and operational efficiencies, resulting in lower unit costs of production and greater returns across its combined gas portfolio.
The transaction will enable Direct Energy to meet around 35 per cent of its customers’ gas demand through its own sources of production. This is in line with Centrica’s strategy to build a more integrated North American business with leading positions in deregulated markets.
The assets are located 35 km northwest of Calgary, adding to Direct Energy's existing acreage positions in central and southern Alberta and consist of 97 producing wells, associated infrastructure and 42,000 net acres of undeveloped land.
Further gas development opportunities may also exist by leveraging the unconventional reservoir gas exploitation expertise Centrica has in both Canada, and in the UK following the acquisition of Venture.
Centrica chief executive Sam Laidlaw commented: "We will continue to explore opportunities to secure further strategic gas and power assets in North America to enhance the scale of the business, and support Direct Energy’s expanding retail energy businesses.”
deal is expected to close during the fourth quarter of 2010.