Wednesday, BG GROUP Plc (BG.L), a natural gas company, said that its subsidiaries has entered into an agreement with subsidiaries of BP Plc (BP.L), wherein the company would mutually exchange equity interests in their North Sea production assets.
Accordingly, BG Group will acquire BP's entire equity of the Everest, Lomond and Armada fields in UK Central North Sea, increasing its stake by 80% in these fields. Also, the company would get a part of BP's equity in the Erskine field that is operated by Chevron Corp. (CVX).
In exchange, BG Group will transfer all of its exploration and production interests in the Southern North Sea to BP, including Easington Catchment Area fields and the BG Group equity in the BP-operated Amethyst field.
According to BG Group, the exchange is broadly neutral in value and production for both the companies. The exchange is valued at about £300 million and would be satisfied solely through the exchange of equity interests in the relevant fields.
The deal between the BG Group and BP is expected to be completed towards the middle of next year, subject to regulatory and third party approvals.
Executive Vice President and Managing Director, Europe and Central Asia of BG Group, Mark Carne said that the agreement consolidates and strengthens BG Group's UK Continental Shelf interests with significant potential in the Central North Sea.
Currently, BG.L is down 17 pence, trading at 811 pence on the London Stock Exchange.
BP.L is down 14 pence, trading at 494.75 pence on the LSE.
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