Tullow gas field sale nets €10m

Tullow Oil will make a €10 million profit from the sale of a share in two North Sea fields to British Gas parent Centrica, it emerged yesterday.

The exploration company announced yesterday that it had increased its stake in the Horne and Wren North Sea gas fields to 100 per cent, and sold 50 per cent to Centrica, which owns former UK state utility British Gas.

Tullow did not reveal the sale price but Centrica said it had agreed to pay £7.1 million (€10.22 million) for the stake in the two fields.

The Irish Times understands that this figure will represent Tullow's profit from the transaction. Centrica will pay £4.6 million up front for its stake, and will contribute £24 million to developing the field, which is due to begin production during the first half of next year.

Tullow paid around £2 million for its remaining 50 per cent interest in Horne and Wren. It acquired an initial share in the block as part of a deal with ARCO/BP in 2001.

The company increased this through a series of purchases from Shell companies. The multi-national wanted to pull out of its involvement in the field and concentrate on bigger projects.

Tullow has a majority stake in the Thames Infrastructure and the onshore Bacton terminal, which link the lower North Sea fields with Britain. This is currently generating €5 million a year in tariff income for the Irish company.

Tullow has also agreed terms with Mobil North Sea and EOG Resources to allow them to transport gas from the recently-discovered Arthur Field in the North Sea to Britain via the Thames and Bacton infrastructure.

Its share price rose one cent to €2.02 in Dublin yesterday. In London, the stock was 3.25p stronger at 141.25p.