Award of UK North Sea Explora

RNS Number : 4663U

Serica Energy plc

25 June 2009

 



Serica Energy plc

('Serica' or the 'Company')

SERICA AWARDED UK NORTH SEA EXPLORATION LICENCE

London, 25 June 2009 - Serica Energy plc (AIM & TSX-V: SQZ) announces that it has been awarded a Production Licence over Block 22/19c in the UK 25th Round of Offshore Licensing (the 'Licence').  Serica is the Licence operator and holds a 100% working interest.

Block 22/19c lies in the UK Central North Sea and is located approximately 20 kilometres to the west of Serica's Columbus field, currently under development. The Licence contains two Palaeocene Forties sand prospects known as Oates and Bowers. The Oates prospect is considered low risk and exhibits a well-defined amplitude response on the 3D seismic data, similar to that seen in the Columbus field, in which three successful wells have been drilled by the Company. The Oates prospect has estimated prospective resources of 180 billion standard cubic feet of gas or 60 million barrels of oil, depending upon whether oil or gas is found.

The Licence is classed as a Traditional Licence and, during the initial term of four years, Serica must drill a well to test the Palaeocene target and at the end of the initial term 50% of the Licence area must be relinquished. 

Serica CEO Paul Ellis said: 

'We are delighted to have been awarded Block 22/19c as it was the highest ranked block in our 25th Round applications. Success with the Oates prospect could also enhance the economics of the Columbus development, through the shared use of facilities such as pipelines and risers. We look forward to an early start to our drilling programme, so that potential development synergies may be realised.'

Supplemental information:

The area covered by the Licence is approximately 150 square kilometres.  

The License was granted on 20 June 2009 for a period of up to 26 years subject to certain work programme and relinquishment requirements.  

The principal reservoir target is the Palaeocene age Forties sandstone, which may contain light oil or gas and which lies approximately 2900 metres below sea level. Water depth in the Licence is approximately 90 metres. The planned exploration well to test the Forties reservoir at the Oates prospect is estimated to cost US$20 million. Serica hopes to drill the well within the first twelve months of the Licence, although its commitment is to drill a well within the initial four year term.

The nearest commercial development of a Palaeocene sandstone reservoir is at the Monan field, which lies approximately eight kilometres to the east of the Licence. The Columbus gas-condensate field, the Huntington oil field and the Mungo oil field all lie within 20 kilometres of the Licence.

It is equally likely that oil or gas could be found at the Oates prospect and the estimate of most likely prospective resources is either 180 billion cubic feet of gas or 60 million barrels of oil. If the exploration is successful, the production wells would probably be tied back to nearby existing infrastructure and be sold into the UK market at the then prevailing term or spot oil and gas prices. The probability of technical success for the Oates prospect has been estimated at approximately 40%.  These estimates of prospective resources and probabilities of success have been made by Serica's in-house technical team. The prospective resources are those quantities of oil and gas presently estimated to be potentially recoverable from these undiscovered accumulations. If discovered, they would be technically and economically viable to recover. However, there is no certainty that these prospective resources will be discovered.

Serica is the operator of the Licence and is also the operator of the Columbus gas-condensate field in Block 23/16f which is currently under development 20 kilometres east of Block 22/19c.  Serica operates other exploration ventures in the UK, Ireland, Spain and Indonesia and has a 50% interest in the Kambuna field in Indonesia that will soon provide the Company's first significant production revenue.  Serica is also participating in the Tuong Vi well currently being drilled offshore Vietnam and was recently awarded two large exploration blocks offshore Morocco.

Enquiries:

Serica Energy plc
Paul Ellis, CEO	[e-mail]	[phone]
Chris Hearne, CFO	[e-mail]	[phone]
JPMorgan Cazenove
Steve Baldwin	[e-mail]	[phone]
Tristone Capital Limited
Majid Shafiq	[e-mail]	[phone]
Pelham Public Relations
Philip Dennis Andy Cornelius	[e-mail] [e-mail]	[phone] [phone]
CHF - Canada
Cathy Hume	[e-mail]	[phone]
Catarina Cerqueira	[e-mail]	[phone]

The technical information contained in the announcement has been reviewed and approved by Peter Sadler, Chief Operating Officer 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. 

Forward Looking Statements

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: 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To receive Company news releases via email, please contact [e-mail] and specify 'Serica press releases' in the subject line.

 

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