Following the announcement dated 20 December 2022 by Serica Energy that it had entered into an agreement to acquire the entire issued share capital of Tailwind Energy Investments from Tailwind Energy Holdings, Serica has announced the publication of a Circular to shareholders on the proposed transaction which will be posted later today and which can be found on its website: www.serica-energy.com. An updated presentation can also be found on the website.
Mitch Flegg, CEO of Serica, commented:
'We’re pleased to be publishing the Circular to Serica shareholders today setting out why we think the acquisition of Tailwind delivers exciting benefits to Serica shareholders and enables the Company to enter a new growth phase.
We are delighted by the transaction which we believe will improve cashflow and capital return predictability for shareholders and be immediately accretive on key metrics while also maintaining a strong balance sheet, providing increased resilience through the diversification of the Serica portfolio and create a platform for further growth in the future.
I look forward to working closely with our new colleagues to deliver on the range of opportunities this transaction creates for all our stakeholders.'
Strategic Rationale for the Transaction
The Board of Serica believes the Transaction will have a number of benefits for Serica:
- Diversifies and strengthens portfolio by adding a new production hub in the Triton area, resulting in a balanced mix of gas and oil and an enlarged hopper of short cycle organic growth opportunities
- Significantly increases reserves and production, lifting Serica into the top ten UK producers; with net production expected to increase by 50-80% in 2023 and sustained until 2025 at above 40,000 boe/d, and reserves increased by 67% as at 1 January 2022 before allowing for the full impact of Tailwind’s successful 2022 work programme
- Expected to be immediately accretive to Serica’s reserves, production, cash flow and earnings per share
- Enhances financial strength, retaining a net cash position at completion with strong ongoing cashflows thereafter supporting M&A, organic investments and returns to shareholders
- Introduces Mercuria as a committed strategic investor with deep energy experience and wide geographic reach
Click here for full announcement
Source: Serica Energy
