Direct Energy, a North American subsidiary of Centrica plc, has reached an agreement with Suncor Energy Inc.(NYSE: SU) to acquire its natural gas assets in the Wildcat Hills region of Alberta, near Cochrane, for a cash consideration of C$375 million (£229 million).
This acquisition will provide Direct Energy with 241 billion cubic feet equivalent (bcfe) of additional natural gas reserves, an increase of approximately 60%, and an incremental 80 million cubic feet per day (mmcfe) of natural gas production.
According to Direct Energy, the additional resources will enable the comapny to meet around 35% of its customers' gas demand through its own sources of production.
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.
Suncor is continuing to divest of a number of non-core assets. Announced sales to date include all oil and gas producing assets in the US Rockies, some non-core natural gas properties in Western Canada, all shares in Petro-Canada Netherlands BV, and all Trinidad and Tobago assets. Remaining proposed divestments include certain natural gas assets in Western Canada and non-core North Sea assets.
To date – including the sale announced today – Suncor has disposed of, or reached agreements to dispose of, assets for aggregate consideration of approximately $2.8 billion, prior to closing adjustments.
This latest transaction, subject to regulatory approval and pre-emption rights on some of the assets, is expected to close during the fourth quarter of 2010.
Source: Suncor Energy, Direct Energy