UPDATE: Centrica Buys 22% Of UK N Sea Gas Producer Venture
March 18 2009 - 8:33AM
Dow Jones News
The U.K.'s largest gas and electricity retailer, Centrica PLC
(CNA.LN), said Wednesday it has bought a 22.3% stake in North Sea
gas producer Venture Production PLC (VPC.LN) for GBP239.4
million.
Centrica said it may in the future make a full cash offer for
Venture, but there is no certainty at this stage.
It has already acquired 33,016,611 Venture shares at 725 pence a
share.
Centrica doesn't produce enough gas to supply all of its retail
customers in the U.K. and its earnings are highly exposed to
volatility in wholesale gas prices. One of the company's strategic
goals is to reduce this exposure by acquiring gas producing
assets.
"Venture remains one of our top picks in the exploration and
production sector," said a research note from analysts at Collins
Stewart. "While volume growth will be fairly modest this year,
reserves growth should be strong and should presage stronger
volumes in 2010-2011."
The Venture stake will increase Centrica's net gas production by
7.7%. Venture produced an average of 45,000 barrels of oil
equivalent of hydrocarbons a day in 2008, compared with Centrica's
output of 128,000 boe a day. The bulk of both companies' production
was natural gas.
It is also in talks with Electricite de France SA (1024251.FR)
about taking a 25% stake in its nuclear subsidiary British Energy,
aimed at diversifying Centrica's electricity production.
At 1156 GMT Centrica shares were up 1.1%, or 3p, at 150p.
Venture shares were up 24.9%, or 145p, at 725p, in a flat broader
market.
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317;
james.herron@dowjones.com
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