REG - Serica Energy PLC - 2023 Year End Reserves and 2024 Production Update

Serica EnergyAnnouncement

07/03/2024 07:00

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RNS Number : 9036F  Serica Energy PLC  07 March 2024

Serica Energy plc

("Serica" or the "Company")

2023 Year End Reserves and 2024 Production Update

London, 7 March 2024 - Serica Energy plc (AIM: SQZ), a British independent
upstream oil and gas company with operations in the UK North Sea, today
announces its estimated oil and gas reserves at 31 December 2023 and an update
on production during January and February 2024. The reserves estimates are
extracted from an independent report prepared by RISC Advisory in accordance
with the reserve definitions guidelines defined in the SPE Petroleum Resources
Management System 2018.

 

Highlights 1 

 

·     Net Proved plus Probable ("2P") reserves at 31 December 2023 of
140 million boe, up 10 million boe from 130 million boe at 31 December 2022
despite producing 14 million boe in 2023 on a proforma combined Serica and
Tailwind basis

·      Overall 2P reserves additions of 24 million boe during 2023
representing a reserves replacement ratio of 179% 2 

·      Over 90% of 2P reserves in fields that are already in production

·      Even split of oil and gas reserves

·      Average net production in January and February 2024 about 45,500
boe per day

·      Production guidance for 2024 remains at 41,000 to 48,000 boe per
day

 

Mitch Flegg, Chief Executive of Serica, said:

 

"I am delighted that Serica has maintained its record of more than replacing
reserves since 2018, with the company ending 2023 with higher reported
reserves than from the combined Serica and Tailwind portfolios at the start of
the year even after allowing for the oil and gas we produced in 2023. Nearly
all the additions to reserves reported today are associated with fields that
are already producing which limits incremental emissions. This record of
delivery is a testament to the hard work of our staff and the underlying
quality of the asset portfolio.

 

Production in the early part of 2024 has been encouraging and we look forward
to the future impact of executing our investment programme this year. We are
on track to commence the planned well intervention and drilling activities on
the Bruce and Triton assets during the coming month.

 

It would be remiss not to express considerable disappointment with the
extension of the EPL announced in the Budget yesterday. Current oil and gas
prices do not represent windfall conditions for UK producers and increasing
the tax burden on domestic oil and gas production again will be damaging for
UK jobs and the economy. The achievements delivered by Serica have added to
domestic sources of energy. The kind of approach exhibited in the Budget will
lead to more imports and reduce the ability of our industry to enhance the
UK's resilience to potential energy shocks in the future."

 

Oil and Gas Reserves

 

The 2P reserves net to Serica and movement during 2023 are summarised in the
table below. The reserves at 31 December 2022 and 2023 production are
pro-forma numbers, including the assets of Tailwind throughout the year.

 

 

                                  Oil       Gas     Total

                                  (mmbbl)   (bcf)   (mmboe 3 )
 2P Reserves at 31 December 2022  65        380     130
 2023 Production                  (7)       (37)    (14) 4 
 Revisions                        12        67      24
 2P Reserves at 31 December 2023  70        410     140

 

Revisions include the following items (increase unless stated):

 

·      Bruce Hub

o  Future investments in Bruce Hub facilities and wells including Bruce SCE
infill well, Bruce and Keith well interventions and LP 5  compression project
on the Bruce platform

o  Updated Bruce and Rhum reserves reflecting better than previously
projected performance of producing wells during 2023

o  Reduction arising from deferral of Bruce field reservoir stimulation
project following reprioritisation of opportunities

 

·      Triton Area

o  Gannet E reserves updated to reflect better than originally projected
performance of GE0-04 well following first oil during 2023

o  Progress towards Belinda development including the exercise of rig option

o  Reduction in Bittern reserves due to remodelled production projections

 

·      Columbus

o  Increase to reflect better than expected production during 2023

 

2024 Production 6 

 

Average net production during January and February 2024 was about 45,500 boe
per day.

 

Production guidance for 2024 remains at 41,000 to 48,000 boe per day.

 

Regulatory

 

This announcement is inside information for the purposes of Article 7 of
Regulation 596/2014.

 

The technical information contained in the announcement has been reviewed and
approved by Fergus Jenkins, VP Technical at Serica Energy plc. Mr. Jenkins
(MEng in Petroleum Engineering from Heriot-Watt University, Edinburgh) is a
Chartered Engineer with over 25 years of experience in oil & gas
exploration, development and production and is a member of the Institute of
Materials, Minerals and Mining (IOM3) and the Society of Petroleum Engineers
(SPE).

 

Enquiries:

 

 Serica Energy plc                                                          +44 (0)20 7390 0230
 Mitch Flegg (CEO) / Martin Copeland (CFO) / Stephen Lambert (VP Legal and
 External Relations)

 Peel Hunt (Nomad & Joint Broker)                                           +44 (0)20 7418 8900
 Richard Crichton / David McKeown / Georgia Langoulant

 Jefferies (Joint Broker)                                                   +44 (0)20 7029 8000
 Sam Barnett / Will Soutar

 Vigo Consulting (PR Advisor)                                               +44 (0)20 7390 0230
 Patrick d'Ancona / Finlay Thomson                                          serica@vigoconsulting.com

 

NOTES TO EDITORS

Serica Energy is a British independent oil and gas exploration and production
company with a portfolio of UKCS assets.

Serica has a balance of gas and oil production. The Company is responsible for
about 5% of the natural gas produced in the UK, a key element in the UK's
energy transition.

Serica's producing assets are focused around two main hubs: the Bruce, Keith
and Rhum fields in the UK Northern North Sea, which it operates, and a mix of
operated and non-operated fields tied back to the Triton FPSO. Serica also has
operated interests in the producing Columbus (UK Central North Sea) and
Orlando (UK Northern North Sea) fields and a non-operated interest in the
producing Erskine field in the UK Central North Sea.

Serica's portfolio of assets includes multiple organic investment
opportunities.

Further information on the Company can be found at www.serica-energy.com
(http://www.serica-energy.com) . The Company's shares are traded on the AIM
market of the London Stock Exchange under the ticker SQZ and the Company is a
designated foreign issuer on the TSX. To receive Company news releases via
email, please subscribe via the Company website.

 1  Reserves at 31 December 2022 and production during 2023 are based on
pro-forma numbers including Tailwind assets as if owned throughout the year

 2  Revisions / 2023 Production

 3  2P Reserves at 31 December 2022 and 2023 are as per the CPR for year end
2023 and have been converted to barrels of oil equivalent using a factor of
5.8 bcf per mmboe. The actual calorific values of gas produced from individual
fields vary. Consequently, production and revisions in the table above may not
convert precisely.

 4  The total annual rate of production reported on 5 February 2024 was based
on calorific values of gas produced from individual fields

 5  Conversion of gas production facilities to Low Pressure operations

 6  Based on calorific values of gas from individual fields

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