SSE plc has agreed to sell all of its interests in its portfolio of gas exploration and production (E&P) assets to Viaro Energy via its subsidiary RockRose Energy Limited for a total consideration of £120m. The transaction is based on a ‘locked box’ economic date of 31 March 2019 and is subject to regulatory approval and partner consent.
The diverse portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea: the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area.
As part of the transaction, SSE will retain an obligation to pay 60% of the decommissioning costs, payable as the decommissioning of the assets occurs.
SSE has stated for some time that its financial investment in E&P assets is a non-core activity and ultimately not aligned with its strategic focus on reaching net-zero emissions. This sale is part of SSE’s strategy to refocus its investment on its core networks and renewables businesses, with plans to invest £7.5bn in low-carbon energy infrastructure over the next five years and to treble its renewable electricity output by 2030.
The company has so far secured over £1.4bn from the disposal of non-core assets as part of its £2bn-plus disposal programme by autumn 2021. Today’s announcement follows recent agreements to sell its share in energy-from-waste venture Multifuel Energy Limited for £995m, its non-operating stake in Walney Offshore Wind Farm for £350m, and its equity interest in meter asset provider MapleCo for £90m.
Gregor Alexander, Finance Director, said:
“We have said for some time that gas exploration and production assets are inconsistent with our future ambitions and vision to be a leading energy company in a net-zero world.
"This sale clearly comes at a difficult time for the E&P sector, and the economy as a whole, but we believe it is the right move for our shareholders as we focus our resources on our core low-carbon businesses.
“It represents further progress on our strategy to dispose of non-core assets as we look to invest £7.5bn in essential low-carbon energy infrastructure over the next five years, driving the UK’s transition to a net-zero future.”