CNA: Centrica PLC: Acquisition

  CNA: Centrica PLC: Acquisition

UK Regulatory Announcement


15 April 2013

Centrica and QPI make C$1 billion natural gas asset acquisition and establish
                   new NorthAmerican upstream partnership

Centrica plc and Qatar Petroleum International (QPI), the international arm
and wholly owned subsidiary of Qatar Petroleum (QP), have agreed to acquire
jointly a package of producing conventional natural gas and crude oil assets
and associated infrastructure located in the Western Canadian Sedimentary
Basin from Suncor Energy for C$1 billion (£650 million) in cash. The
acquisition is the first investment under the Memorandum of Understanding
(MoU) signed between the two parties in December 2011.

The assets will be held in a newly established partnership between Centrica
(60% share) and QPI (40% share), which will be operated by Centrica. The
assets include 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.

The assets are located principally in South and Central Alberta where they
overlap with existing Centrica assets, providing the opportunity for cost
savings in production and development, and in North East British Columbia. The
package also includes over 1 million acres of undeveloped land and there is
significant potential for reserves and production upside through the use of
horizontal drilling and multi-stage fracturing.

Sam Laidlaw, Chief Executive of Centrica, said: “I am delighted to achieve our
first investment with QPI under the MoU, and the establishment of a new
partnership in North America. The acquisition provides attractive returns in a
region we know well, and significantly increases the size and quality of our
portfolio. It also presents exciting development opportunities, with the
potential to improve returns further.”

“Today’s announcement marks another step in delivering the strategy we
announced in February and strengthens the relationship between Centrica and
QPI. We look forward to working together to further expand the scale and scope
of our joint North American operations.”

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.”

                                   - ends -

Centrica Investor Relations: 01753 494900
Centrica Media Relations: 0800 107 7014

QPI Corporate Development: 00974 4452 0122

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 effective date of the transaction is 1 January 2013.
  *Proven and probable reserves figures are as at 31 December 2012.
  *Direct Energy proven and probable reserves figures as at 31 December 2012
    were 646bcfe.


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