SSE offloads gas E&P assets to Viaro for £120m
SSE is focusing on renewables (pic: Terry Murden)
Energy company SSE is selling its portfolio of gas exploration and production assets to Viaro Energy via its subsidiary RockRose Energy for £120m.
The portfolio comprises non-operational equity shares in more than 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 investment in E&P assets is a non-core activity and ultimately not aligned with its focus on reaching net-zero emissions through renewables businesses.
It plans to invest £7.5 billion 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 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.”
Bank of America Securities acted as financial adviser to SSE and CMS acted as legal adviser.
RockRose Energy was founded in 2015 to identify onshore and offshore production opportunities and infrastructure projects.
The company grew rapidly through the purchase of packages of predominantly non-operated assets in the North Sea.
Key acquisitions included Idemitsu’s UK business in 2017, a portfolio of producing assets in the Dutch sector of the North Sea from Dyas in 2018, and Marathon Oil’s UK assets in 2019.
In 2020, RockRose Energy was acquired by Viaro Energy, a subsidiary of Viaro Investment, in a £247 million deal.