HOUSTON and CALGARY, Alberta, April 15, 2013 /PRNewswire/ -- 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 2012.
- Direct Energy proven and probable reserves figures as at 31 December 2012 were 646bcfe.
SOURCE Centrica plc; Direct Energy