Spirit Energy can confirm that it has agreed to partner on the development of the Pegasus West gas discovery in the UK Southern North Sea with Neptune Energy.

Under the agreement, Neptune will farm-in to the Pegasus West discovery and surrounding acreage (P1724, P1727, P4257 and P2128) with a 38.75% interest, with Spirit Energy holding the remaining 61.25% stake and operatorship.

The licence interests match the partners’ equities in the nearby Neptune-operated Cygnus gas field, which under the agreement will become the host platform for the Pegasus development, subject to OGA approval.

Spirit will remain operator of the Pegasus West licence under the transaction, which is effective from 1 January 2021, until a final investment decision is approved, at which point Neptune will become operator of the development through to first gas and into production. Spirit and Neptune will work closely together on FEED studies in 2021 with the intention to reach a final investment decision within the next 12 months.

Gerry Harrison, EVP, HSES, Subsurface & Non-Operated UK Assets at Spirit Energy, said: “As a subsea tieback to Cygnus, Pegasus West will be a great example of how we can build on the UK’s existing infrastructure, maintain security of supply and reduce our carbon intensity.

“With an estimated 83 billion cubic feet of recoverable gas at Pegasus West, it adds further volumes to the Greater Cygnus Area and we are looking forward to working with Neptune to bring this development through to production.”

About Spirit Energy

Spirit Energy was created in 2017 following the combination of Centrica’s Exploration & Production business and Bayerngas Norge AS. The business is 69%-owned by Centrica plc, with the remaining 31% owned by Bayerngas Norge’s former shareholders, led by Stadtwerke München and Bayerngas GmbH.

The independent company was formed to combine a complementary mix of producing and development assets, and creates a robust, self-financing business to allow both organic and inorganic growth.

About Neptune Energy Group

Neptune Energy is an independent global E&P company with operations across the North Sea, North Africa and Asia Pacific. The business had production of 142,000 net barrels of oil equivalent per day in 2020 and 2P reserves at 31st December 2020 of 601 million barrels of oil equivalent. The Company, founded by Sam Laidlaw, is backed by CIC and funds advised by Carlyle Group and CVC Capital Partners.