First reserve sells E.ON

German energy company E.ON has won the bidding to buy Caledonia Oil & Gas Ltd (COGL), a UK gas production company with interests in a total of 15 gas fields in the UK southern North Sea, for an enterprise value including debt of €690m (£470m). Centrica, the UK gas company and Tullow Oil, the £1.4bn London-headquartered oil and gas company, were among the rival bidders.

Caledonia Oil & Gas was formed in 2003 by First Reserve private equity and the former management team of Highland Energy, First Reserve’s North Sea gas production company, with the objective of acquiring and developing natural gas reserves.

“The acquisition of Caledonia brings us significantly closer to our goal of covering up to 15%–20% of the gas needs of E.ON Ruhrgas from our own production in the long run. This investment is fully in line with our strategy of enhancing E.ON’s gas procurement,” said E.ON CEO Wulf Bernotat.