Germany's E.ON puts North Sea, Algeria assets on the block

* German utility hopes to fetch $2 bln for assets -bankers

* Official sale launch expected within weeks

By Ron Bousso and Freya Berry

LONDON, June 23 (Reuters) - German utility E.ON wants to sell its North Sea and Algerian oil and gas assets, hoping to raise around $2 billion as it restructures, several banking sources said.

The move adds to the rising number of North Sea assets on the market as a result of lower oil prices, but with few deals being concluded.

E.ON has given several prospective buyers access to data on its international exploration and production assets ahead of the official launch of the sale mandate which is expected in the coming weeks, bankers and industry sources said.

Bank of America Merril Lynch is arranging the sale process, which will be held through an auction, according to the sources.

"E.ON has opened up data rooms for its North Sea and Algerian assets," one source said.

E.ON declined to comment on the launch of the sale process saying that it has placed its North Sea exploration and production (E&P) business under strategic review.

"The review is ongoing and will consider the future options for the business including, for example, a sale of the business," a spokesman said.

The assets are estimated to fetch around $2 billion, though oil price valuations between buyers and sellers have varied significantly in recent months following the drop in crude prices over the past year.

As a whole, E.ON's E&P unit made 1.1 billion euros ($1.23 billion) in earnings before interest, tax, depreciation and amortization (EBITDA) last year, about 13 percent of the utility's total.

Most of it comes from the group's North Sea assets, which had a combined output of 22.3 million barrels of oil equivalent (boe) in 2014.

In Norway, E.ON has a 30 percent stake in the Njord field, a 28.1 percent stake in the Skarv field and a 17.5 percent stake in the Hyme field, according to its website.

In the British North Sea, it operates the Huntington, Babbage, Johnston, Hunter and Rita fields and also holds interests in several producing fields.

In Algeria, E.ON holds a 49 percent of the exploration licence for the Rhourde Yacoub area in the Berkine basin, according to its website.

Its Russian assets are not for sale, the sources said.

E.ON, Germany's largest utility, last year said it would spin off its power plant business, energy trading and oil and gas activities into a separate unit. It has agreed to sell its businesses in Spain, Portugal and Italy.

Dozens of oil and gas production assets have been put on the market around the world in recent months as companies struggle to boost balance sheets in the wake of the oil price fall. More than $110 billion assets were on the market at the start of the year.

Royal Dutch Shell (Xetra: R6C1.DE - news) 's $70 billion bid to acquire smaller British rival BG Group (LSE: BG.L - news) in April has failed to spark a wave of deals, as buyers and sellers have different views on the value of assets and the future oil prices, the sources said. (Additional reporting by Christoph Steitz in Frankfurt, editing by William Hardy)