Centrica And Qatar Petroleum International To Acquire Natural Gas And
Conventional Crude Oil Business From Suncor Energy For C$1 Billion (US$1
Builds on Direct Energy Upstream's Growth in North America
HOUSTON and CALGARY, Alberta, April 15, 2013 /CNW/ - Centrica plc (LSE: CNA)
and Qatar Petroleum International (QPI), the international arm and wholly
owned subsidiary of Qatar Petroleum (QP) have reached an agreement with Suncor
Energy (TSX: SU / NYSE: SU) to acquire a vast majority of its conventional
natural gas and crude oil business in the Western Canadian Sedimentary Basin
for C$1 billion (US$1 billion) in cash. The transaction is subject to
regulatory approval, including the Canadian Competition Act and the Investment
Canada Act, and is expected to close in the third quarter of 2013.
The business will be held in a newly established partnership between Centrica
(60% share) and QPI (40% share), which will be operated by Centrica. The
acquisition is the first investment under the Memorandum of Understanding
(MoU) signed between the two parties in December 2011.
Centrica and QPI will acquire this business, including all related facilities
and infrastructure from Suncor Energy situated across multiple regions in
Alberta, northeastern British Columbia and southern Saskatchewan. The business
includes proven and probable (2P) reserves estimated by the partners at 978
billion cubic feet equivalent (bcfe) (90% natural gas), with estimated 2013
production of approximately 250 million cubic feet equivalent per day
(mmcfe/d), equal to 15 million barrels of oil equivalent (mmboe) per annum.
Following the close of the transaction, Centrica will be able to meet
approximately 60% of the unregulated daily gas requirements of its growing
Direct Energy customer base across North America.
The deal is the latest step in Centrica's and Direct Energy's effort to build
a diversified, vertically integrated energy business to meet the energy needs
of business and residential consumers across North America. At C$1 billion
(US$1 billion), this is Centrica's largest acquisition in North America in
over a decade, when the company, through its Direct Energy subsidiary acquired
Enbridge Home Services in January 2002.
"In today's competitive energy environment this acquisition represents an
ideal strategic fit for Centrica's existing upstream portfolio and skill
sets," said Wes Morningstar, Senior Vice President with Centrica in Calgary.
"It also reinforces our strong commitment to our operations in Western Canada.
Growing our upstream gas operations is an important step to ensuring the
company is a solid long-term partner to millions of residential and business
customers across North America."
Nasser Al-Jaidah, Chief Executive Officer of QPI, said: "Fulfilling the vision
of His Highness the Emir of Qatar, Sheikh Hamad bin Khalifa Al Thani, of
expanding our business beyond our borders, and under the guidance and support
of His Excellency the Minister of Energy & Industry, Qatar Petroleum Board
Chairman and Managing Director Dr. Mohamed bin Saleh Al Sada, we are pleased
to be advancing our important ongoing relationship with Centrica under the MoU
through this joint acquisition. This investment in the Western Canadian
Sedimentary Basin is a significant step in the development of QPI's global
upstream business. We look forward to continuing to advance QP's overall North
American energy business through the MoU and other initiatives."
Centrica has been active in the Western Canadian Sedimentary Basin since 2000,
and has increased its natural gas reserves by approximately 60 per cent with
the 2010 acquisition of Suncor Energy's assets in the Wildcat Hills region of
Alberta and related interests from Shell Canada Energy in 2011. In 2012,
Centrica also acquired additional producing natural gas weighted assets in the
Carrot Creek region of west central Alberta from Encana Corporation.
About Direct Energy
Direct Energy is one of North America's largest energy and energy-related
services providers with over six million residential and commercial customer
relationships. Direct Energy provides customers with choice and support in
managing their energy costs through a portfolio of innovative products and
services. A subsidiary of Centrica plc (LSE: CNA), one of the world's leading
integrated energy companies, Direct Energy operates in 46 U.S. states plus the
District of Columbia and 10 provinces in Canada. To learn more about Direct
Energy, please visit www.directenergy.com.
Notes to Editors:
-- The acquisition will be made through CQ Energy Canada
Partnership, a newly formed Canadian partnership owned by
Direct Energy Resources Partnership (60%), a wholly owned
subsidiary of Centrica plc, and QPI Energy Canada Ltd. (40%), a
Canadian corporate entity wholly owned by QPI.
-- The transaction is subject to regulatory approval, including
under the Canadian Competition Act and the Investment Canada
Act, and is expected to close in the third quarter of 2013.
-- The economic date of the transaction is 1 January 2013.
-- Proven and probable reserves figures are as at 31 December
-- Direct Energy proven and probable reserves figures as at 31
December 2012 were 646bcfe.
Micah Hirschfield, Direct Energy, +1 713 877 3805,
SOURCE: Centrica plc
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