Serica Energy plc Update on BKR Transaction (1266A)
September 07 2018 - 4:00AM
UK Regulatory
TIDMSQZ
RNS Number : 1266A
Serica Energy plc
07 September 2018
Serica Energy plc ("Serica" or the "Company")
Update on BKR Transaction
London, 7 September 2018 - Serica Energy plc (AIM: SQZ)
announces that it has today agreed with BP to extend the completion
timetable for the BKR transaction for one month until early
November 2018. This extension is to enable outstanding regulatory
and partner consent processes to be completed, including processes
by the US Office of Foreign Assets Control (OFAC) relating to the
Rhum Field.
These consents are part of the conditions for completion as set
out when the BKR transaction was announced. For operational and
logistical reasons to ensure a safe and efficient transfer of
ownership and operations, they are required a few weeks before
transfer of operations can commence. Serica and BP are working
closely together and are committed to achieving this new timetable.
The terms of both the BP transaction and the related transaction
with Total remain unchanged.
In particular, Serica continues to be entitled to a share of net
cash flows from the BKR Assets relating to the BP and Total
interests during the period from the effective date of the BP and
Total acquisitions (1 January 2018) to the date of Completion. This
will continue to be the case under the extended timeline, with gas
prices achieving record levels during the effective period since
the start of the year.
All other transition requirements, including transfer of
offshore and onshore staff, readiness of operating, safety and
environmental procedures and transfer of all contractual
obligations, are ready to complete once all outstanding consents
have been received. Serica has made good progress with the
acquisition and transition programme, working closely with BP, and
will be ready to assume operatorship of the BKR Assets once the
outstanding conditions have been met.
Mitch Flegg, Chief Executive of Serica Energy, commented:
"We have taken the decision to extend the completion period on
BKR as a practical measure that provides additional time for the
approvals process to complete. We are working closely with the
various authorities and with field partners to satisfy all
remaining conditions and we appreciate the commitment that the
relevant parties are making as we near completion of this complex
transaction. Serica is well prepared to assume operatorship of the
assets. Together with BP, we remain fully committed to completing
the BKR deal.
Completion of these important transactions will enable Serica to
assume operatorship and optimise the full performance of these
valuable UK offshore assets, extend producing life where possible
and ensure maximum recovery of remaining reserves. Coming at a time
of strong gas prices and significantly improved oil prices the
Company is set to benefit from the resultant strong cash flows
which have occurred since the start of the year, as well as from
resumed production at Erskine which is expected to occur later this
month as planned. We look forward to achieving these objectives and
remain on track to do so."
Technical Information
The technical information contained in the announcement has been
reviewed and approved by Clara Altobell, VP Technical at Serica
Energy plc. Clara Altobell (MSc in Petroleum Engineering from
Imperial College, London) has over 20 years of experience in oil
& gas exploration, production and development and is a member
of the Society of Petroleum Engineers (SPE) and the Petroleum
Exploration Society of Great Britain (PESGB).
Regulatory
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
Enquiries
Serica Energy plc
Tony Craven Walker
Executive Chairman tony.cravenwalker@Serica-energy.com +44 (0)20 7457 2020
Mitch Flegg
CEO mitch.flegg@Serica-energy.com +44 (0)20 7457 2020
Peel Hunt
Richard Crichton richard.crichton@peelhunt.com +44 (0)20 7418 8900
Ross Allister ross.allister@peelhunt.com +44 (0)20 7418 8900
James Bavister james.bavister@peelhunt.com +44 (0)20 7418 8900
Instinctif
David Simonson david.simonson@instinctif.com +44 (0)20 7457 2020
Catherine Wickman catherine.wickman@instinctif.com +44 (0)20 7457 2020
George Yeomans george.yeomans@instinctif.com +44 (0)20 7457 2020
Notes to Editors
Serica Energy is an oil and gas exploration and production
company with exploration, development and production assets in the
UK and exploration interests in the Atlantic margins offshore
Ireland and Namibia. Serica holds an 18% non-operated interest in
the Erskine field in the UK Central North Sea and a 50% operated
interest in the Columbus field scheduled to commence development in
2019.
In November 2017 Serica announced the BKR Transaction under
which Serica UK will acquire interests in the Bruce, Keith and Rhum
fields in the North Sea and associated infrastructure from BP.
Under the terms of the BKR Transaction Serica UK will acquire a 36%
interest in Bruce, a 34.83% interest in Keith and a 50% interest in
Rhum. The deal has an effective date of 1 January 2018.
In August 2018, Serica announced the proposed acquisition of
further interests in the Bruce and Keith fields and associated
infrastructure in the UK North Sea from Total E&P UK Limited
("Total E&P") ("BK Acquisition"). Under the SPA, Serica will
acquire a 42.25% interest in the Bruce field and a 25% interest in
the Keith field and associated infrastructure ("BK Assets"). The BK
Acquisition also has an effective date of 1 January 2018 and
completion will be subject to completion of the BKR
Transaction.
Further information on the Company can be found at
www.serica-energy.com.
The Company is listed on the AIM market of the London Stock
Exchange under the ticker SQZ and is a designated foreign issuer on
the TSX. To receive Company news releases via email, please
subscribe via the Company website.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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