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December 9, 2021

Spirit Energy to divest Norwegian portfolio for $1.1bn

The divestment is part of Spirit Energy’s strategy to decarbonise its portfolio.

By Aninda Chakraborty

The Centrica subsidiary Spirit Energy has signed agreements to divest its Norwegian oil and gas exploration and production portfolio, including the Statfjord field, for $1.076m (£800m).

The arrangement will also include a contingent payment linked to commodity prices.

As agreed, the company will sell its interests to Sval Energi, while Equinor will acquire its stake in the Statfjord field.

The divestment is part of the company’s strategy to decarbonise its portfolio.

Spirit Energy CEO Chris Cox said: “The sales agreements are in accordance with the strategy of Spirit Energy’s owners to reduce the carbon intensity of its portfolio.

“Over the last 15 years, we have created an attractive cash-generating business in Norway with producing assets, future developments and exciting exploration opportunities. Sval Energi is acquiring a successful and solid business.”

Spirit Energy has interests in more than 30 producing fields and has approximately 128 exploration licences in the UK, Norway, and the Netherlands as of 2020.

The company produced an estimated 44.9 million barrels of oil equivalent (Mboe) last year.

According to a statement released by the company, the sale will reduce the Spirit Energy Group’s oil and liquids reserves by 92% and gas reserves by 38%.

The company will continue to operate as a business in the Netherlands and the UK.

Centrica holds a 69% stake in Spirit Energy. The remaining 31% stake is held by Stadtwerke München GmbH SWM.

The net consideration received from the transactions will be distributed among the two partners in proportion to their ownership.

The sales will also boost Spirit Energy’s balance sheet, simplify its operations, as well as enable it to focus on its core markets of the UK and Ireland.

The transactions, which have a commercial effective date of 1 January 2021, are expected to be completed in the second quarter of next year, subject to  approval from Centrica and SWM Group shareholders.

Cox added: “After the sale of Spirit Norway, Spirit Energy is now predominantly a gas business which will continue to provide much-needed energy to households and businesses, with a low carbon footprint.”

Earlier this year, Spirit Energy partnered with Neptune Energy to develop the Pegasus West gas discovery in the UK North Sea.

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