Centrica sells Canadian gas assets for 240 million

Centrica Plc, Britain’s largest energy supplier, has struck a deal to sell its entire 60% stake in its Canadian oil and gas exploration and production business to a consortium for about 240 million ($305 million).

The sale to Hong Kong-listed oil and gas producer MIE Holdings Corp, The Can-China Global Resource Fund and Swiss commodity trading firm Mercuria, is part of Centrica’s efforts to focus its oil and gas exploration and production activities to Europe.

MIE said it would pay about $722 million for mostly natural gas resources which currently pump approximately 56,000 barrels of oil a day. 2 million net acres of land plus ownership in 11 major processing facilities is also part of the deal.

According to analysts at Jeffries, who classify Centrica as “underperform”, the price tag was in line with their estimate of 267 million pounds.

Centrica’s share of the earnings will be used to lower its net debt to 2.5-3 billion pounds by the end of this year.

Last year, Centrica agreed to sell its gas assets in Trinidad and Tobago for $30 million to Royal Dutch Shell.

The deal which is subject to regulatory approvals, is expected to close in the second half of 2017.

This purchase is the latest by MIE, it already owns a 33.6% stake in Calgary oil producer Journey Energy Inc.