5th Nov 2018 09:43
LONDON (Alliance News) - Serica Energy PLC said on Monday it has signed an agreement to increase its holding in the Bruce and Keith fields in the UK North Sea for GBP1 million.
Under the agreement, Serica will acquire a 16% interest in Bruce and a 32% stake in Keith from miner BHP Billiton PLC, bringing its total holdings in Bruce and Keith to 94% and 92% respectively. The acquisition is expected to increase Serica's proven and probable net reserves to 62.7 million barrels of oil equivalent from 58.7 million as at August 1, it said.
In November 2017, Serica agreed to buy a 36% interest in Bruce, a 34.8% stake in Keith and a 50% stake in Rhum, also in the UK North Sea - collectively known as the BKR assets - from oil major BP PLC for an initial cash consideration of GBP12.8 million with an additional contingent consideration of up to GBP39.1 million depending on production milestones and gas price thresholds being met.
In addition, Serica said that the conditions related to the licence for the Rhum field issued by the US Office of Foreign Assets Control have been fulfilled, marking another step taken towards completing the sale agreement with BP.
The acquisitions are subject to regulatory and government approvals, but are expected to be completed by November 30, Serica said.
"This acquisition, in addition to the previously announced transactions with BP and Total [SA], place us in an even better position to unlock increased value from the assets and benefit from economies of scale," said Chief Executive Mitch Flegg.
"Completion of the transaction with BHP is anticipated to take place immediately after the respective completions of the BP and Total E&P transactions. This will represent a major transformation for Serica in becoming one of the leading UK independent offshore operators and producers in the North Sea," Flegg added.
Shares in Serica Energy were up 8.4% at 129.00 pence on Monday.