logo-loader
viewCentrica PLC

Centrica takes a blow to sale plans with latest drill result

Centrica plans to divest its 69% stake in Spirit Energy, partner with Hurricane at the Greater Warwick Area where well test did not show expected results

Centrica PLC - Centrica takes a minor blow for sales plans

 

Centrica PLC's (LON:CNA) recovery plans took a minor blow on Monday as exploration results for the third and last well in the Greater Warwick Area (GWA) failed to match the previous hole in the campaign.

Warwick West in the UK Continental Shelf flowed at 1,300 barrels per day compared to 9,800boepd from Lincoln Crestal in September.

 

READ: Centrica's problems underlined by Npower retrenchment

The results leave the £800mln Centrica is said to want for subsidiary Spirit Energy, which drilled the wells in partnership with Hurricane Energy PLC (LON:HUR), looking punchy said analysts.

The FTSE 100-listed firm has plans to divest its 69% stake in Spirit to focus on its utility and services businesses.

Spirit Energy has stakes in 13 producing fields on the UK continental shelf producing 130,000boepd, seven of which are operated, and is developing the half-owned Pegasus West project in the North Sea, where a final investment decision expected for next year.

Spirit is also involved in 60 offshore exploration licences and eight onshore permits.

Analysts said the exploration outcome at GWA means Centrica will have to re-price accordingly.

"If it had come in, the [sale] price would have been higher,” James Midgley, Energy Research Analyst at Mirabaud, told Proactive on the phone.

“Now that this well has not come in any possible upside will have to be knocked off the valuation."

“£800mln is pretty rich for that asset anyway,” he added.

Centrica was trading 2% lower at 78.68p on Monday afternoon.

Quick facts: Centrica PLC

Price: 80.2 GBX

LSE:CNA
Market: LSE
Market Cap: £4.67 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

NQ Minerals' David Lenigas updates as it looks to nearly double mining...

NQ Minerals PLC's (NEX:NQMI)(OTCQB:NQMLF) David Lenigas speaks to Proactive London's Andrew Scott after announcing they're to contract a second, high capacity mining dredge to boost its mining operations at the Hellyer project in Tasmania. The second dredge has a capacity to move 100 tonnes...

42 minutes ago

RNS

Directorate Change

5 days, 7 hours ago

Total Voting Rights

1 week, 1 day ago

Trading Statement

2 weeks, 5 days ago

Blocklisting Application

3 weeks, 4 days ago

2 min read