London, 18 December 2019 - Serica Energy plc (AIM: SQZ) is pleased to announce that its wholly owned subsidiary, Serica Energy (UK) Limited, has received an Out of Round award of a 100% interest in the UK petroleum licence P2501, blocks 3/24c and 3/29c. These are located in the area adjacent to the Serica operated Rhum field.
The award contains the HPHT North Eigg and South Eigg prospects. The primary prospect is North Eigg which is estimated to contain 360 bcf (P50) and potentially over 1Tcf (P10) of recoverable gas. The North Eigg prospect is interpreted to share many geological similarities with the Rhum field. It is clearly defined on 3D seismic and forms a structural trap sealed against the East Shetland bounding fault.
Serica has committed to drilling an exploration well within three years and in the event of a commercial discovery intends to develop the field via a subsea tie-back to the Serica operated and 98% owned Bruce facilities. As well as providing Serica with potentially significant additional reserves, a tie-back to the Bruce platform would reduce unit operating costs and extend the economic life of this strategic North Sea infrastructure.
Mitch Flegg, Chief Executive of Serica Energy, commented:
"We are delighted to have received this Out of Round award.
Since we completed our acquisition of the Bruce, Keith and Rhum ("BKR") assets just over a year ago, our strategy has been to optimise economic returns through a hub strategy that includes operating efficiencies, investment and securing new third-party business in the BKR catchment area. Not only is this award an important step in our BKR hub strategy, it reinforces exploration as a material part of Serica's upstream business.
These are exploration prospects and so there is no guarantee of success. In the event of a commercial discovery, the optimal development option will be a tie-back to the Bruce platform, which we would seek to fast track. In the meantime, our other efforts to enhance the value of the BKR assets will continue unabated. These include planning for the rig intervention in 2020 designed to bring the Rhum-3 well into production for the first time and efforts to bring new third-party business to the Bruce facilities."