British utility Centrica
Centrica, the parent of household energy supplier British Gas, will buy 5 billion cubic metres of natural gas per year -- about 5 percent of the UK's annual gas needs -- between 2015 and 2025 in a deal worth about 13 billion pounds
It will also buy from Statoil a package of oil and gas production and development assets off Norway for up to $1.625 billion, lifting its output by around 12 million barrels of oil equivalent per year and its probable and proven reserves by 29 percent.
The gas deal, an extension to a contract set to expire in 2015, lets Statoil maintain its 16-18 percent market share in the UK, a vital market for Norway's biggest energy firm, and the divestments confirm relatively high asset values for the firm.
They are selling the stakes for about $12.5 per barrel of oil equivalent, and most of it is gas, so this is a reasonably good price. Most North Sea deals that have included oil and gas over the last year have been at around $11-12, Fondsfinans analyst Magnus Smistad said.
It's a bit higher than the average gas stake prices of recent (times). Centrica and Shell recently did a deal that was below $10, Smistad added.
Others said it indicated upside in North Sea asset values.
Centrica's desire to improve its energy hedge would suggest it doesn't see commodity prices going lower, and therefore the implication is that the value of North Sea assets are the very least underpinned at these levels, if not likely to rise, Evolution Securities said in a note.
The deal also frees $2 billion (1.28 billion pounds) in development costs, allowing Statoil to focus on core assets, the firm said.
The reserves and assets being sold today ... have an associated capex of about $2 billion. This means we have liberated about $3.7 billion for redeployment, John Knight, a Statoil executive vice president said.
TAX REGIME A FACTOR
The deal will have a negative impact on Statoil's production in 2012 but the company said its longer-term guidance did not change.
Centrica said it picked Norway for its strong prospects and stable tax regime.
The UK clearly is becoming more mature, and the opportunities in Norway, we think, are great ... We do take into account fiscal stability, and there have been fewer changes in the tax regime in Norway than there have been in the UK over the last 10 years, Centrica Chief Executive Sam Laidlaw said.
Centrica will gain minority stakes in the Kvitebjoern, Heimdal and Valemon fields while exiting the Skrine-Byggve, Fulla, Frigg-Gamma-Delta, Vale and Rind prospects.
Kvitebjoern, the main asset in the deal, produces around 60 million of barrels of oil equivalent (mmboe) per year of gas and oil, of which Centrica's 19 percent share will be 11.4 mmboe per year.
Centrica shares eased 0.14 percent in early trade, outperforming bigger falls among energy stocks, while Statoil was down 1.5 percent, compared with the broader market's <.OBX> 2.2 percent decline.
The natural gas deal, though large, was expected as the UK's output is declining, while Statoil has gas enough to place.
The UK's production is falling sharply, and it's natural for Centrica to want to have parts of its portfolio in Norway, Arctic Securities analyst Trond Omdal said.
After making large discoveries on the Norwegian shelf and expanding internationally, it's natural for Statoil to cut some stakes, he added.
(Additional reporting by Joachim Dagenborg and Adveith Nair; Editing by Will Waterman)