The third-biggest oil and gas producer in the U.K. – BG Group Plc – made a statement today, revealing that it plans to sell its stake in a North Sea pipeline network in a deal estimated at 562 million pounds (954 million dollars).
This move is part of a strategy of the company, which is focused on rationalizing its portfolio. The announcement comes at a time when the the companys major natural-gas business is affected by decreasing output and restrictions on sales from Egypt, which is currently one of the most important gas-manufacturing operations of the company.
According to the companys statement, BG Group Plc has made the decision to sell its 63% interest in the Central Area Transmission System to Antin Infrastructure Partners. The transaction is expected to be finalized over the second half of the year. It will not impact the rights of BG Group Plc to use the pipeline network in question. The deal is also considered to help the company generate a post-tax profit estimated at around 700 million dollars.
One of the analyst who work at Banco Santander in Edinburgh – Mr. Jason Kenney said in a note, cited by Bloomberg: “This is a modest but good deal at this juncture for BG.” It “could be positive on a trading basis for the stock signaling as it hopefully does that the company is making progress in its aim to be more aggressive with divestments.”
This is considered as the first large divestment of the company since the removal of Mr. Chris Finlayson from the position of Chief Executive Officer in April this year. The former CEO Mr. Finlayson was succeeded by Chairman Mr. Andrew Gould, who is now following the strategy of more “active portfolio management” in order to accelerate returns to the companys shareholders.
Under the terms of the deal, BG Group Plc will keep the right to access gas transport capacity on the North Sea pipeline network, which is 404-kilometer long and is responsible for pumping up to 1.7 billion cubic meters of gas on a daily basis. The transaction also includes an acquisition of a platform linked to the Everest oil and gas platform as well as an onshore gas processing terminal, which is located at Teesside.
BG Group Plc was adding 0.12% to trade at 1 259 pence per share by 11:30 GMT, marking a one year change of +5.49%.
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