Centrica growing offshore North Sea oil and gas reserves base

Centrica’s upstream capital investments last year totaled £2.7 billion ($4.06 billion), of which about £2 billion ($3 billion) was directed at North Sea gas and oil assets, including the completion of three acquisitions.

Offshore staff

WINDSOR, UK – Centrica’s upstream capital investments last year totaled £2.7 billion ($4.06 billion), of which about £2 billion ($3 billion) was directed at North Sea gas and oil assets, including the completion of three acquisitions.

The company achieved first gas from itsEnsign, Seven Seas, and Atla development projects. Centrica anticipates start-ups in the next few weeks at the York field facilities in the UK southern North Sea and at Rhyl in the Irish Sea off northwest England.

So far this year the company has had exploration drilling successes on theRodriguez structure offshore Norway and on Whitehaven in the Irish Sea. This follows a relatively unsuccessful period in 2012 that included a development well failure at Ensign, leading to a pre-tax write-off of £73 million ($110 million).

Last year the company added 170 MMboe of 2P reserves, due partly to upgrades of existing hubs via projects such as Rhyl. Centrica ended the year with 525 MMboe of 2P reserves, with its Norwegian interests now accounting for 41% of its reserves, compared to 18% at the end of 2011.

Performance from the South Morecambe complex in the Irish Sea improved during 2Q 2012 following action to stabilize the quality of gas delivered to the UK grid during the field’s maintenance shutdown last summer.

Aside from York and Rhyl, Centrica expects to produce first gas from the Kew field in the UK North Sea this fall.

In the Norwegian North Sea, the company and its partners in the Statoil-operatedValemon development reached agreement on detailed design, and fabrication started early this year. Valemon is expected to start up in late 2014.

Appraisal drilling at the non-operated Maria North well (Centrica 20%) suggests recoverable reserves at theMaria field are toward the upper end of the 70-150 MMboe range, which was declared following the initial discovery in 2010.

3/1/2013

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