Serica Energy has announced the entry into a sale and purchase agreement, via two of its newly acquired subsidiaries following the completion of the Prax Upstream transaction, to acquire a portfolio of Southern North Sea assets from Spirit Energy and certain affiliates. The upfront consideration is £57 million (c.$74 million) with the effective economic date being 1 January 2025. Completion is expected in H2 2026.
The Acquired Assets comprise a 15% non-operated working interest in the Cygnus field, one of the largest producing gas fields on the UK Continental Shelf; a 25% non-operated working interest in Clipper South; operated positions across various assets in the Greater Markham Area ('GMA'); and further operated and non-operated interests in gas fields across the Southern North Sea, being Eris (54% operated working interest), Ceres (90% operated working interest), and Galleon (8.4% non-operated working interest). Following completion, the seller will retain decommissioning liabilities on the operated assets, expected to constitute over 75% of the total estimated decommissioning liability.
Chris Cox, Serica's CEO, stated:
'This transaction is a further step towards delivering on our strategy and diversifying our asset base through the addition of high-quality assets, adding over 15% to our reserves and significantly boosting production. These are also assets I personally know well, and the Cygnus field in particular is an attractive addition to our portfolio given its high uptime, low emissions, and low operating costs. There is also the potential for further infill drilling opportunities across the portfolio, most significantly at Cygnus, where drilling is ongoing.
The transaction will require only modest cash outflow on completion and is set to generate material cash flows, while also limiting our exposure to future decommissioning costs, enhancing Serica's ability to create further value for shareholders through investing in growth and delivering attractive cash returns.'
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Source: Serica Energy
