Centrica plc announced that subsidiaries of its Spirit Energy Limited business agreed to sell a 46.25% interest in the Cygnus gas field in the North Sea to a subsidiary of Ithaca Energy plc.
The transaction, which is subject to NSTA consent, will increase Ithaca Energy’s operated interest in Cygnus to 85%.
The Cygnus gas field is the largest UK Continental Shelf gas field.
“The total value of the transaction to Spirit Energy is approximately £215 million, including headline consideration of £116 million and the transfer of £99 million of decommissioning liabilities associated with the interest,” said Centrica.
“Centrica’s 69% share of headline consideration is expected to be £80 million.
“The disposal has a commercial effective date of 1 January 2025 and is expected to complete during the second half of 2025, with customary interim period adjustments to be applied.”
Ithaca said: “Cygnus is the largest UK Continental Shelf gas field and a key contributor to the UK’s energy security.
“Production started in 2016 with 11 wells currently producing, with three further infill wells approved, with the Valaris Norway on location with the first of the two firm wells to be spud in Q2 2025, and expected onstream during H2 2025 and H1 2026.
“The field is located in the Southern North Sea in blocks 44/11a, 44/11b and 44/12a in water depths in the range of 15 to 25 meters.”
Ithaca executive chairman Yaniv Friedman said: “Today’s transaction with Spirit Energy provides further equity in a high-margin, high-quality producing gas asset that we understand deeply through our operatorship.
“This deal follows our Japex (Seagull) deal announced just two months ago and further demonstrates our growth strategy in action.
“By increasing our stake in Cygnus we add incremental reserves and production to our portfolio at attractive valuation metrics that ticks all of our investment criteria, without adding any complexity.
“We also see significant upside potential through further infill drilling beyond the next three approved wells. This is the type of deals we like.”
Chris O’Shea, Group Chief Executive of Centrica and Chairman of Spirit Energy, said: “Our focus is on delivering value for Centrica’s colleagues, customers and shareholders through the energy transition.
“Through this disposal we are taking another step in reducing our exposure to gas production while accelerating the delivery of enhanced value to shareholders, allowing the Spirit team to further focus on delivering the largest carbon storage project in Europe at Morecambe Net Zero.
“This is only one of many exciting opportunities across Centrica, aligned to the energy transition, as we continue to re-position our infrastructure portfolio, and we remain firmly focused on capturing the immense value on offer.“