3rd Dec 2008 11:00
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News Release |
December 3, 2008
BG Group expands operations in the UK North Sea through asset exchange with BP
BG Group plc today announced the exchange of equity interests in certain North Sea production assets with subsidiaries of BP plc (LSE: BP.L).
Subject to satisfaction of certain conditions, BG Group proposes to acquire BP's entire equity in the Everest, Lomond and Armada fields and part of BP's equity in the Erskine field, operated by Chevron (NYSE: CVX). All of the BP fields are located in the UK Central North Sea. In return, BG Group will transfer all of its equity interests in fields in the Southern North Sea to BP.
The exchange is broadly neutral in value and production for both BG Group and BP. The value of the exchange is approximately £300 million and will be satisfied solely through the exchange of equity interests in the relevant fields.
BG Group's Executive Vice President and Managing Director, Europe and Central Asia, Mark Carne said: "This agreement consolidates and strengthens BG Group's UK Continental Shelf interests. By focusing on material interests in key hubs, we can increase efficiency and economically develop satellite fields. We have also shown with recent high-pressure, high-temperature finds that there is still significant potential in the Central North Sea."
BG Group will assume control of BP's equity in the Everest, Lomond and Armada fields, increasing its equity stake in these fields from around 60% to around 80%. BG Group will become operator of the Everest and Lomond fields and will continue to operate the Armada field.
As part of this agreement, BG Group will transfer its exploration and production interests in the Southern North Sea to BP. These include the Easington Catchment Area (ECA) fields (Apollo, Artemis, Mercury, Minerva and Neptune, which are BG Group-operated, and the BP-operated Wollaston and Whittle fields), and the BG Group equity in the BP-operated Amethyst field.
Completion of the exchange is expected towards the middle of next year, subject to regulatory and third party approvals
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Notes to Editors:
BG Group plc is a world leader in natural gas, with a strategy focused on connecting competitively-priced resources to specific, high-value markets. Active in 27 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves.
With interests in more than 20 UK Continental Shelf (UKCS) fields, BG Group has one of the most significant exploration and production businesses in the offshore waters of the UK.
BG Group is one of the most active players in the UKCS. The Company drilled 25 exploration and appraisal wells in the period 2004-2006 and by the end of 2008. BG Group will have drilled 14 wells in the UK Continental Shelf during 2007-2008.
In 2008, BG Group has drilled, or participated in, successful appraisal wells in the Jackdaw, Jasmine and West Franklin fields and has made two discoveries - Moth and Huntington.
The West Franklin field is now estimated to have gross reserves close to 200 million barrels of oil equivalent.
The exchange of assets is between subsidiaries of BG Group (BG International Limited, BG International (CNS) Limited, BG International (NSW) Limited and BG North Sea Holdings Limited) and subsidiaries of BP (BP Exploration Operating Company Limited, Amoco U.K. Petroleum Limited and Amoco (U.K.) Exploration Company).
Media Enquiries:
Jo Thethi +44 (0) 118 929 3110
Out of hours media mobile: +44 (0) 791 718 5707
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Website: www.bg-group.com
There are matters discussed in this media information that are forward looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to the Company's annual report and accounts for the year ended 31 December 2007. The Company does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
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