Centrica announces the sale of Spirit Energy’s Norwegian oil and gas assets and run-off strategy for the remaining Spirit Energy business
Centrica plc announces that, in line with the Group’s stated strategy, subsidiaries of the 69% Centrica owned Spirit Energy Limited (“Spirit Energy”) group (“Spirit Energy Group”) have entered into agreements to sell the Spirit Energy Group’s Norwegian oil and gas exploration and production business excluding the Statfjord field to Sval Energi AS (“Sval”) and its interests in the Statfjord field to subsidiaries of Equinor ASA (“Equinor”) (the “Sale Business and Interests”).
The transaction has a commercial effective date of 1 January 2021 with headline consideration of $1,076 million (equivalent to approximately £800 million) in cash on a debt free, cash free basis, plus a deferred commodity price linked contingent payment. The consideration payable at closing (the “Net Consideration”) will be subject to customary adjustments to reflect working capital and debt like items. It will also be reduced for net post-tax cash flows generated by the Sale Business and Interests since 1 January 2021, adjusted for any remaining tax payable on these net cash flows to be paid by the Spirit Energy Group (the “Net Cash Flow”). As of 31 October 2021, the Sale Business and Interests had generated £376 million of net cash flows since 1 January 2021. Whilst significantly dilutive to earnings in the near term, all decommissioning liabilities related to the Sale Business and Interests will be transferred to the buyers as part of the transaction.
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