Centrica, which also owns Britain's largest energy supplier British Gas, said in July it was preparing to sell its 69% stake in Spirit Energy to focus on consumer energy services as part of its move away from fossil fuels.
The UK utility will now also run the sale on behalf of the other owners, led by Bayerngas GmbH and Munich's municipal utilities company Stadtwerke München, as these make a u-turn on their interest in oil and gas exploration and production, one of the sources said.
Neither Bayerngas GmbH nor Stadtwerke München had any immediate comment. Spirit Energy and Centrica declined to comment.
Spirit was created in 2017 from the merger of Centrica and Bayerngas Norge's oil and gas assets in Britain, Denmark, the Netherlands and Norway, with a view to create an independent European energy producer that could eventually be listed.
The firm employs more than 800 workers and has annual production of 50 million barrels of oil equivalent.
Centrica, Bayerngas GmbH and Stadtwerke München are only the latest power producers to abandon fossil fuels as a surge in demand for cleaner renewable energy which is replacing gas and coal-fired power generation disrupts their business models.
Traditional European utilities typically entered oil and gas production as a hedge against fluctuating costs of hydrocarbons.
Italian energy group Edison, part of French utility EDF, sold its oil and gas unit to Greek explorer Energean.
France's Engie sold its exploration and production business to private equity-backed Neptune Energy, and German utility RWE (RWEG.DE) divested its oil and gas production unit DEA.
Spirit Energy is likely to appeal to a number of private equity-backed firms that have transformed the ownership of North Sea producers over the past five years, buying assets from major producers including Royal Dutch Shell, Exxon Mobil and Chevron.
Spirit's shareholders are likely to seek interest in the assets from Norway's HitecVision and billionaire Jim Ratcliffe's petrochemicals company Ineos, a second source said.
(Additional reporting by Ron Bousso and Susanna Twidale)
By Clara Denina and Arno Schuetze