Serica Energy plc
("Serica" or the "Company")
SERICA REVIEWS ALTERNATIVE EXPORT ROUTE FOR COLUMBUS PRODUCTION
London, 28 March 2013 - BG has informed Serica, as Operator of the Columbus field, that it has decided not to proceed with the construction of a Bridge Linked Platform ("BLP") adjacent to the BG operated Lomond field. The BLP was to be part of the export route for gas and gas condensate from the Columbus field.
As a consequence, the Columbus group are reviewing other alternatives for the export of Columbus gas and liquids production. This includes the possibility of the Columbus field being tied directly to the Lomond Platform. Serica believes this to be a viable alternative and will be reviewing this with its partners and with BG to provide, as far as possible, that the impact on the Columbus sub-sea development programme and timetable will be minimal.
Tony Craven Walker, Chairman and Interim CEO, said
"The decision by BG not to construct the Lomond BLP was unexpected but we are confident that we will be able to conclude alternative export arrangements and limit the impact on Columbus which remains commercially viable as a separate field development. BG's decision is unrelated to the Columbus field and we look forward to discussing production alternatives with them. It is important, at a time of severe gas shortages in the UK, that we bring ashore as expeditiously as we can, those reserves of gas and related liquids which still remain to be developed in the North Sea and we remain confident that we can do that with Columbus."
We continue to make good progress on all our activities, particularly those relating to the major exploration potential of our interests in the largely unexplored Atlantic Margin basins offshore Ireland, Morocco and Namibia, and I look forward to providing an update on these, as well as Columbus, in due course."
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NOTES TO EDITORS
Serica Energy was formed in 2004 and has interests in discovered oil and gas reserves in the UK and Norway and significant exploration interests in the Atlantic Margin basins offshore Ireland, Morocco and Namibia.
The Columbus Field comprises stratigraphically trapped hydrocarbons within sandstone reservoirs of the Palaeocene Forties Formation located over Blocks 23/16f and 23/21 in the Central North Sea. The field was discovered in 2006 by well 23/16f-11 and subsequently appraised by wells 23/16f-12, 23/16f-12z and 23/21-7x. The fluids are gas condensate and the central estimate of ultimate recovery is 88.1bcf of produced gas and 3.3mmbbls of condensate. Peak quarter production is predicted to be 51 mmscf/d of gas and 3,600 bbl/d of condensate.
The field will be developed by two near horizontal wells, 23/16f-P1 and 23/16f-P2 located in the centre and the north of the field respectively. The wells will be drilled from the vicinity of a single drilling location and completed with subsea xmas trees.
The Columbus Field will be developed and produced as a unitised field by the participants in Blocks 23/16f and 23/21 (excluding Lomond). The interests of this Production Group are
Serica Energy (UK) Limited (operator) 33.20%
Endeavour Energy UK Limited 16.60%
EOG Resources United Kingdom Limited 16.60%
BG International Limited 27.50%
SSE E&P UK Limited 6.10%
The development plan anticipated that the wells would be tied-back via a subsea manifold and an 8km x 8" diameter pipeline, riser and dedicated slug catcher with allocation metering located on a newly built Bridge Linked Platform (BLP). The BLP was planned to be connected to the existing Lomond facilities and fluids would have passed through the Lomond compression system. Gas and liquids would have been be commingled with Lomond and third party fluids and exported via the CATS and Forties pipeline systems. Following BG's decision not to proceed with the BLP alternative export routes will have to be secured for the Columbus production.
The technical information contained in the announcement has been reviewed and approved by Peter Sadler, Business Development Director of Serica Energy plc. Peter Sadler is a qualified Petroleum Engineer (MSc Imperial College, London, 1982) and has been a member of the Society of Petroleum Engineers since 1981.
The Company is listed on both the Toronto Stock Exchange and the London AIM under the ticker SQZ.
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FORWARD LOOKING STATEMENT
This disclosure contains certain forward looking statements that involve substantial known and unknown risks and uncertainties, some of which are beyond Serica Energy plc's control, including: geological, geophysical and technical risk, the impact of general economic conditions where Serica Energy plc operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Serica Energy plc's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Serica Energy plc will derive therefrom.
