Spirit Energy Up for Sale

(Photo: Spirit Energy)
(Photo: Spirit Energy)

Energy group Centrica and Stadtwerke Muenchen (SWM) Group have launched the sale of Spirit Energy, one of the North Sea's biggest oil and gas producers, according to a document sent to prospective buyers seen by Reuters.

Spirit Energy currently produces around 130,000 barrels of oil equivalent per day (boed) which is set to taper off to around 100,000 boed by 2025, although it also comes with 270 million boe in so-called 2P reserves, the document showed.

Such yet-to-be-exploited barrels can be attractive to some of the private-equity backed firms that have bought aging North Sea assets from oil majors in recent years, looking for future growth ahead of a potential stock market listing or sale.

The debt-free company had 894 million pounds ($1.14 billion) in 2018 operating cash flow allowing for dividend payments and around 500 million pound annual investments, the document said.

Spirit Energy has invested around $400 million in Hurricane Energy, which in June reported first oil at its Lancaster field off Scotland, the first such success for so-called fractured basement reservoirs in Britain.

Centrica, which also owns Britain's largest energy supplier British Gas, said in July it was preparing to sell its 69% stake in Spirit Energy to focus on consumer energy services as part of its move away from fossil fuels.

Reuters reported in August that Spirit Energy's other shareholders had joined Centrica's planned exit, with sources valuing the company at around 1.5 billion pounds.

The document says Centrica wants to sell its 69% stake while SWM will "evaluate proposals" for the remaining stake, including a cash or share transaction or the entrance of a new partner.

Goldman Sachs and Lambert Energy are listed as advisors.

Spirit was created in 2017 from the merger of Centrica and Bayerngas Norge's oil and gas assets in Britain, Denmark, the Netherlands and Norway, with a view to creating an independent European energy producer that could eventually be listed.

Spirit Energy's sale comes at a busy time for asset and corporate sales of European oil and gas assets.

A first bid round for Blackstone backed Siccar Point ended last week. State-run Korea National Oil Corp (KNOC) is currently offering part of its Dana Petroleum vehicle and private equity backed Zennor Petroleum is also for sale.

Earlier this year, private equity backed Chrysaor bought ConocoPhillips' British North Sea fields and Chevron sold most of its North Sea portfolio to Israel's Delek Group.

($1 = 0.7815 pounds)

(Reporting by Ron Bousso, writing by Shadia Nasralla; Editing by Kirsten Donovan)

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