REG - Serica Energy PLC - Proposed acquisition of North Sea assets from BP

Serica EnergyAnnouncement

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RNS Number : 0759D  Serica Energy PLC  13 October 2025

 

13 October 2025

 

Serica Energy plc

('Serica' or 'the Company')

 

Proposed acquisition of UK North Sea assets from BP

 

Serica Energy plc (AIM: SQZ) is pleased to announce the signing of an
agreement to acquire the entirety of BP's stake in the P111 and P2544 licences
('the Proposed Acquisition'), located in the UK Central North Sea. Completion
is subject inter alia to the waiver of applicable pre-emption rights.

 

The Proposed Acquisition comprises a 32% non-operated working interest in the
P111 licence, containing the Culzean gas condensate field ('Culzean'), and
P2544, an exploration licence adjacent to the P111 licence. The Culzean field,
operated by TotalEnergies, is currently the largest single producing gas field
in the UK North Sea. As per the terms of the joint operating agreement between
the Culzean field partners, the Proposed Acquisition announced today is
subject to a pre-emption period which runs for 30 days, with each of the
Culzean field partners (TotalEnergies, 49.99%, and NEO NEXT, 18.01%) having
the option to acquire BP's stake in the licences on the same terms as those
agreed by Serica. The Company will update the market further as and when
appropriate.

 

Chris Cox, Serica's CEO, stated:

"Should this transaction complete, it would deliver a step-change for Serica,
adding material production and cash flows from the largest producing gas field
in the UK. Culzean is a world-class asset, delivering gas from a modern
platform with exceptionally high uptime and low emissions."

 

KEY TERMS OF THE PROPOSED ACQUISITION

The Proposed Acquisition has an economic date of 1 September 2025 and an
upfront cash consideration of $232 million, subject to customary working
capital adjustments and partially offset by the receipt of a payment
reflecting interim post-tax cashflows between the economic date of the
transaction and the completion date, expected around the end of 2025.

 

The terms of the Proposed Acquisition also include provision for two further
cash payments contingent on: (1) successful results and production from a
large exploration opportunity on the P2544 licence; and (2) changes to the UK
ring-fence fiscal regime. Further details of the Proposed Acquisition
transaction terms will be provided following the expiry of the pre-emption
period.

 

The Company can fund the consideration through a combination of interim
cashflows from the Culzean interest and existing financial resources
(including cash and undrawn amounts under the existing $525 million Reserve
Based Lending facility). The Company is however also considering putting in
place a new acquisition facility, which would be refinanced in due course via
increased debt facilities to reflect the Company's larger, more diversified
and cash generative asset base inclusive of the Prax and Culzean acquisitions,
which the Company estimates would support a larger borrowing base.

 

ABOUT CULZEAN

·    Culzean is a mid-life gas condensate field, operated by
TotalEnergies, located in the Central North Sea. It was discovered in 2008,
and came onstream in 2019

·    It is currently the largest gas field on the UK Continental Shelf by
production, with production net to BP of c.25,500 boepd in H1 2025, at an
exceptionally high operating efficiency of 98%

·    Remaining net 2P reserves estimated at c.33 mmboe, as of 01.01.25(1)

·    Upside potential from future infill drilling and licensed exploration

·    Production cost of $10.7/boe(2), with one of the lowest carbon
footprints in the UK North Sea, with emissions significantly below the 20 kg
CO(2)/boe sector average

 

Lambert Energy Advisory is acting as financial adviser to Serica in connection
with the Proposed Acquisition.

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.

 

The technical information contained in the announcement has been reviewed and
approved by Carla Riddell, Chief Technical Officer at Serica Energy plc. Ms.
Riddell (B.Sc. Geology from University of Durham University, M.Sc. Palynology
from University of Sheffield) has over 25 years of experience in oil & gas
exploration, development and production and is a Fellow of the Geological
Society of London and Energy Institute.

 

-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 / Cameron Jones

 Vigo Consulting (PR Advisor)                                              +44 (0)20 7390 0230
 Patrick d'Ancona                                                          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 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) Source: Wood Mackenzie

(2) Source: Wood Mackenzie

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