Centrica Increases Canadian Gas Assets with Wildcat Hills Acquisition
Friday, April 01, 2011
Centrica plc
Centrica announced that its North American subsidiary, Direct Energy, has acquired further natural gas assets located in the Wildcat Hills region of Alberta, from Shell Canada Energy for C$47m (£30m) in cash. The acquisition will give Direct Energy a 100% working interest in certain Wildcat Hills assets and gas processing facilities, which it has operated since October 2010.
It will provide Direct Energy with an additional 45 billion cubic feet equivalent (bcfe) of proven and probable natural gas reserves and an incremental 10 million cubic feet per day (mmcfe) of natural gas production. Following the transaction the company will be able to meet approximately 35% of its enlarged customer gas demand from its own resources and the transaction will lower overall production costs as no additional field or office staffing will be required.
The acquisition marks the latest stage in Direct Energy's strategy of creating a more integrated North American business, with leading positions in deregulated markets. In 2010, as well as acquiring an operated interest in the Wildcat Hills assets, the company established itself as a leading player in the North American home services market with the acquisition of Clockwork Home Services. In March 2011, Direct Energy agreed to buy the New York-based gas and power retailer Gateway Energy Services, adding another 275,000 customer accounts in the US Northeast.
Chris Weston, President and CEO of Direct Energy said, "We are very pleased to have acquired an enlarged interest in the Wildcat Hills region. Growing our upstream business is important in ensuring that we remain a stable, long-term partner to the millions of residential and business customers we serve across North America. We will continue to explore opportunities in both gas and power, to enhance the scale of the business and to support Direct Energy's expanding retail businesses."
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