REG - Serica Energy PLC - Acquisition of assets from Parkmead Group

Serica EnergyAnnouncement

12/12/2024 07:00

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RNS Number : 8387P  Serica Energy PLC  12 December 2024

 

 

12 December 2024

 

Serica Energy plc

('Serica' or 'the Company')

 

Acquisition of assets from Parkmead Group

 

Serica Energy plc (AIM: SQZ) announces that it has signed an agreement to
acquire 100% of the shares in Parkmead (E&P) Limited ('PUK') from Parkmead
Group Plc ('Parkmead'), which includes a 50% working interest in licence P2400
(Skerryvore) and a 50% working interest in licence P2634 (Fynn Beauly), for an
initial consideration of £5 million ($6.4 million 1  (#_ftn1) ).

 

An additional deferred consideration of £9 million ($11.5 million(1)) will be
paid in stages over the next three years, as well as contingent payments
linked to certain development milestones - payable on receipt by Serica of
approval by the North Sea Transition Authority ('NSTA') for a field
development plan ('FDP') relating to Skerryvore or Fynn Beauly. These payments
are calculated based on £0.8/bbl of net 2P reserves contained within the
respective FDP, subject to a cap of £30 million and £90 million
respectively.

 

The transaction provides optionality regarding future projects, simplifies
decision making, and provides strategic flexibility relating to the existing
position in Skerryvore through consolidating the interests in the P2400
licence, in which Serica Energy (UK) Limited, a wholly owned subsidiary of
Serica, already holds a 20% interest. Following completion of the transaction,
Serica will hold 70% and become the operator.

 

The P2634 licence was awarded in the 33(rd) Licencing Round in July 2024 to
PUK, as operator, and Orcadian Energy, and includes the Fynn Beauly heavy oil
discovery. The current licence commitment is limited to technical studies to
assess the feasibility of reducing Fynn Beauly oil viscosity using enhanced
oil recovery techniques.

 

PUK has carried forward tax loss balances which as at the transaction economic
date of 30 June 2024 amounted to £197 million of ring-fence corporation tax
losses, £181 million of supplementary charge tax losses, £1 million of
Energy Profits Levy losses and £12 million of activated investment
allowances. PUK has no employees.

 

The transaction is expected to close in the first half of 2025, subject to
customary completion adjustments and the carve-out of PUK's Dutch assets to a
Parkmead affiliate and NSTA change of control consent.

 

-end-

 

Enquiries:

 

 Serica Energy plc                                                         +44 (0)20 7487 7300
 Martin Copeland (CFO) / Andrew Benbow (Group Investor Relations Manager)

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

 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 and interests in several
earlier stage licences.

 

Serica has a two-pronged strategy for growth comprising investment in its
existing portfolio and M&A. 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  (#_ftnref1) Based on Bloomberg spot rate at 18:30 London time on 11
December 2024 of £1:$1.2755

 

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