TIDMSQZ

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 GBP5 million ($6.4 million [1] ).

An additional deferred consideration of GBP9 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 GBP0.8/bbl of net 2P reserves contained within the respective FDP, subject to a cap of GBP30 million and GBP90 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 GBP197 million of ring-fence corporation tax losses, GBP181 million of supplementary charge tax losses, GBP1 million of Energy Profits Levy losses and GBP12 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:

 
                                          +44 (0)20 7487 
 Serica Energy plc                         7300 
 Martin Copeland $(CFO.AU)$ / Andrew Benbow 
  (Group Investor Relations Manager) 
 
                                          +44 (0)20 7418 
 Peel Hunt (Nomad & Joint Broker)          8900 
 Richard Crichton / David McKeown / 
  Emily Bhasin 
 
                                          +44 (0)20 7029 
 Jefferies (Joint Broker)                  8000 
 Sam Barnett / Will Soutar 
 
                                          +44 (0)20 7390 
 Vigo Consulting (PR Advisor)              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 . 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] Based on Bloomberg spot rate at 18:30 London time on 11 December 2024 of GBP1:$1.2755

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December 12, 2024 02:00 ET (07:00 GMT)