Serica Energy plc ("Serica" or the "Company")
Columbus Field Development Plan Approval
London, 31 October 2018 - Serica Energy plc (AIM: SQZ) is pleased to announce that the Oil and Gas Authority (OGA) has approved the Field Development Plan (FDP) for the North Sea Columbus Development which was submitted for approval in June of this year. Peak production is expected to be 7,800 gross barrels of oil equivalent ("boe") per day. Best Estimate Gross (2C) Contingent Resources have been calculated to be 13.4 million boe.
The Columbus Development is located in Blocks 23/16f and 23/21a Columbus Sub Area in the UKCS Central North Sea. The Development Area will be drained by a single well, which will be connected to the recently approved Arran-Shearwater pipeline, through which Columbus production will be exported along with Arran field production. When the production reaches the Shearwater platform facilities, it will be separated into gas and liquids and exported to terminals onshore. Columbus development timing is dependent on the Arran-Shearwater pipeline being tied into the Shearwater platform in Q3 2020. Columbus start-up is targeted for mid-2021.
OGA approval of the FDP was subject to a number of statutory requirements, including the submission of an Environmental Statement, which was approved by the Department for Business, Energy & Industrial Strategy at the beginning of October.
Serica is operator of the Columbus Development with a 50% interest. Other participants are EOG Resources United Kingdom Limited and Endeavour Energy UK Limited, each holding a 25% interest.
Mitch Flegg, Chief Executive of Serica Energy, commented:
"I am delighted that Serica and its partners are able to announce that development and production consent has been received for Columbus. The project team have worked closely with the OGA and the host infrastructure owners since the Field Development Plan was submitted in June 2018 to achieve this successful outcome. The development is important in its own right and will also enhance our understanding of nearby exploration acreage which was secured by Serica in the UK 30th Licence Round."
Andy Samuel, Chief Executive, Oil and Gas Authority, commented:
"We are pleased with the decision by Serica and partners, EOG Resources and Endeavour Energy, to proceed with their investment in the Columbus development.
Columbus is the final component of the OGA's Central Graben Area Plan, which also included the recently sanctioned Fram and Arran fields, unlocking over 50 million boe recoverable reserves which had struggled for decades to be developed.
It is good to see how the industry has collaborated on many fronts to deliver additional value as part of our Maximising Economic Recovery in the UK agenda and we look forward to Columbus delivering first hydrocarbons in 2021."
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.
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.
The OGA has determined the Columbus Development ("Columbus") to lie within the Lomond Field Determination Area. The Lomond Field and Columbus Development however reside within different licence areas and have independent development plans.
Columbus was discovered in 2006 and subsequently appraised by four further wells. Columbus contains gas condensate stratigraphically trapped within sandstone reservoirs of the Palaeocene Forties Formation.
Columbus will use a single horizontal development well, completed with a subsea xmas-tree and tied-back via a subsea manifold to the recently approved Arran-Shearwater pipeline. Columbus production will be comingled with Arran production in the pipeline. At the Shearwater facilities the Columbus production will be split into gas and liquids and exported separately.
In November 2017 Serica announced the BKR Transaction under which Serica UK will acquire interests in the Bruce, Keith and Rhum fields and associated infrastructure in the UK North Sea 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 acquisition of further interests in the Bruce and Keith fields and associated infrastructure in the UK North Sea from Total E&P UK Limited ("BK Acquisition"). Under the SPA, Serica UK will acquire a 42.25% interest in the Bruce field and a 25% interest in the Keith field and associated infrastructure. The BK Acquisition also has an effective date of 1 January 2018 and completion will be subject to completion of the BKR Transaction.
Together, the two transactions will result in Serica UK holding a 50% interest in the Rhum field, a 78.25% interest in the Bruce field and a 59.83% interest in the Keith field and be operator of all three fields.
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.
