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GdF Suez In Talks To Buy EUR1.08 Billion Of Dutch Gas Assets

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GdF Suez In Talks To Buy EUR1.08 Billion Of Dutch Gas Assets

Dow Jones

By Adam Mitchell

Of DOW JONES NEWSWIRES

PARIS (Dow Jones–French utility GdF Suez SA (GSZ.FR) Friday said it is in exclusive talks to buy a package of gas assets in theNetherlands for EUR1.08 billion, a step towards achieving its medium-term objective of having 1.5 billion barrels of oil equivalent of proved and probable reserves.

The assets, currently owned by Nederlandse Aardolie Maatschappij BV, include working interests of between 30% and 60% in five producing fields, and potential for exploring and boosting volumes, both GdF Suez and NAM said.

The package also contains a stake in the Dutch section of the A6-F3 pipeline, which transports gas from the German North Sea to the Nogat pipeline system, as well as a 30% stake in Nogat BV, the operator of Nogat.

“With this acquisition, GdF Suez reinforces its strong position in the Netherlands and becomes the largest exploration and production operator in the Dutch sector of the North Sea,” said Jean-Marie Dauger, Executive Vice President in charge of Global Gas LNG.

Meanwhile, Societe Generale analyst John Honore said the news underscores that exploration and production are “more and more important” for GdF Suez and that the reserves constitute the most important part of the package of assets.

GdF Suez is a “cash rich company” and therefore this is “not a huge amount,” Honore said, adding that it’s a key asset.

GdF Suez, which was formed this summer through the merger of French state- controlled utility company Gaz de France with utility Suez, plans capital expenditures of EUR30 billion over the three years from 2008 to 2010. Since making its stock-market debut July 22, the unified company has unveiled a slew of investments.

On Thursday, the company announced the acquisition of a 15% stake in an offshore exploration and production license in Azerbaijan. An exploration phase there through late 2011, if successful, will boost GdF Suez’s reserves by approximately 35 million boe, the company said.

GdF Suez had proven and probable reserves of 667 million boe at the end of 2007, a spokeswoman for the company said.

NAM is the largest exploration and production company in the Netherlands and is owned by Royal Dutch Shell PLC (RDSB.LN) and ExxonMobil Corp. (XOM), according to the joint statement from NAM and GdF Suez.

GdF Suez’s purchase of the assets is subject to the successful conclusion of due diligence, staff consultation, regulatory approvals and third party consents.

At 1032 GMT, shares in GdF Suez traded flat at EUR37.28 against a CAC 40 index down 1.2%.

-By Adam Mitchell, Dow Jones Newswires, +33 1 40171740; [email protected] dowjones.com

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  09-05-08 0740ET
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