First Quarter Results

Serica Energy plc
01 May 2007

FOR IMMEDIATE RELEASE:                                                1 May 2007


                 SERICA ENERGY PLC ('Serica' or the 'Company')

                           2007 FIRST QUARTER RESULTS


London, 1 May 2007 - Serica Energy plc (TSX Venture & AIM: SQZ) today announces
its financial results for the three months ended 31 March 2007. The results and
associated Management Discussion and Analysis are included below, and copies are
available at www.serica-energy.com and www.sedar.com.


Enquiries:


Serica Energy plc
Paul Ellis,                        [e-mail]                             [phone]

Chief Executive Officer
Chris Hearne,                      [e-mail]                            [phone]

Finance Director

JPMorgan Cazenove
Steve Baldwin                      [e-mail]                   [phone]

Pelham Public Relations -UK
James Henderson                    [e-mail]                         [phone]
Alisdair Haythornthwaite           [e-mail]                [phone]

CHF - Canada
Jan Moir                           [e-mail]                                        [phone]
Kelly Cody                         [e-mail]                                      [phone]


MANAGEMENT OVERVIEW


Serica is pleased to report that it has continued to build on its 2006
performance with an active first quarter of 2007.



UK North Sea and Norway

Since the year end, Serica has formally been awarded the new licences in both
the UK and Norway that it reported with its full year results. In the UK, Serica
was awarded Block 23/16g in the Central North Sea, Block 48/17d in the Southern
North Sea and Blocks 113/26b and 113/27b (part) in the East Irish Sea.  Serica
is the operator of all four blocks and has a 100% interest in each block except
23/16g, where it has a 50% interest.



In Norway, Serica was awarded a 20% interest in two large licences in the 2006
Awards in Predefined Areas ('APA') Licence Round.  The licences are contiguous
and cover a total area of approximately 1,625 square kilometres in the Egersund
Basin, about 120 kilometres southwest of Stavanger. One of the licences contains
the undeveloped Bream oil discovery.



Preparations for the 2007 drilling campaign continue. In the UK, Serica has
secured the SEDCO 704 semi-submersible drilling rig for Columbus field appraisal
wells in Central North Sea Block 23/16f. The rig has been contracted through AGR
Peak Group and Serica will have two slots in the programme, with drilling due to
commence in Q3 2007. Serica is the operator of the licence and will initially
drill a vertical appraisal well. Depending upon the outcome of the vertical
well, Serica plans to sidetrack the well to drill and test a horizontal
appraisal well. The Columbus appraisal programme follows the success of the
Columbus discovery well, announced in December 2006, which tested at a rate of
17.5 million scfd and 1,000 bopd of condensate.



Indonesia

Serica recently announced the farm-out of a percentage of the Company's interest
in the Biliton PSC. In line with its strategy to spread exploration risk and
manage costs, Serica has signed an agreement with a subsidiary of the privately
owned oil exploration and production company, Nations Petroleum Company Ltd., to
farm-out a 45% interest in the Biliton PSC subject to required regulatory
approval. Nations Petroleum will bear the majority of the costs of the two well
drilling programme, scheduled to commence in Q3 2007. Serica will remain the
operator and will retain a 45% interest in the Biliton PSC. A number of
potentially significant prospects have been identified within the PSC, which is
located offshore in a virtually unexplored basin in the central Java Sea, and
the Seadrill-5 drilling rig is contracted to drill the two exploration wells
back-to-back.



Development of the Kambuna field offshore north west Sumatra is proceeding and
the Seadrill-5 drilling rig will return to drill the development wells in Q4
2007 following the installation of the well head support structure. First
production is expected in late 2008. As reported with the full year results,
slippage in the 3D seismic programme together with delays in the receipt of
approvals from Pertamina have resulted in this later start-up and an application
is being lodged with Pertamina for a revision to the field plan of development.



In the neighbouring Asahan Offshore PSC, Serica has been in discussions with the
Indonesian authorities regarding the continuation of exploration activity in the
area following the expiry of the initial 10 year exploration period of the PSC
in December 2006. To date, in view of the lack of agreement on the commerciality
of the PSC, it has not proved feasible to extend the contract and, accordingly,
it is likely that the PSC will be formally terminated. The Company has therefore
deferred its plans to drill two exploration wells in the PSC this year but has
submitted alternative proposals to enable it and its partners to continue
exploration work in the area under revised terms.



Geological and geophysical work has commenced on the large Kutai Block awarded
to Serica late in 2006 and which lies both offshore and onshore East Kalimantan,
adjacent to major fields.



Forward Programme

Serica has started 2007 in a strong financial position and continues to make
good operational progress in its core areas.



In Q3, Serica will commence its UK and Indonesian drilling programmes with a
Columbus appraisal well and a Biliton exploration well and expects to have
drilled six wells by the year-end. In its new licences and PSCs the Company will
be acquiring and interpreting seismic data and preparing for the 2008
exploration and appraisal drilling campaign. Conceptual development studies for
the Columbus field are underway, so that development can be advanced once the
results of the appraisal wells are available.



Serica remains very focused on creating shareholder value through its
exploration drilling and field development programmes.


The results of Serica's operations detailed below in this MD&A, and in the
financial statements, are presented in accordance with International Financial
Reporting Standards ('IFRS').



MANAGEMENT'S DISCUSSION AND ANALYSIS



The following management's discussion and analysis ('MD&A') of the financial and
operational results of Serica Energy plc and its subsidiaries (the 'Group')
should be read in conjunction with the attached unaudited interim consolidated
financial statements for the period ended 31 March 2007.  The interim financial
statements for the three months ended 31 March 2007 have been prepared by and
are the responsibility of the Company's management and the independent auditors
have not performed a review of these financial statements.



References to the 'Company' include Serica and its subsidiaries where relevant.
All figures are reported in US dollars ('US$') unless otherwise stated.



Overall Performance



Serica's activities are centred on the UK and Indonesia, with other interests in
Norway, Spain, Ireland and Vietnam. The Group has no current oil and gas
production, with the main emphasis placed upon its future exploration drilling
programmes. In 2007 to date, work has continued on managing its portfolio of
interests, accelerating the appraisal of Columbus in the North Sea, advancing
the Indonesian development and preparing for the 2007 drilling programme.
Further details are noted in the Management Overview.



The results of Serica's operations detailed below in this MD&A, and in the
financial statements, are presented in accordance with International Financial
Reporting Standards ('IFRS').


Results of Operations


Serica generated a loss of US$1.6 million for the three months ended 31 March
2007 ('Q1 2007') compared to a profit of US$1.0 million for the three months
ended 31 March 2006 ('Q1 2006'). The Q1 2006 figures have been restated to take
account of the revised accounting treatment for share purchase warrants
outstanding at 31 March 2006.

                                                                                               Q1                Q1 (1)
                                                                                             2007                  2006
                                                                                           US$000                US$000

Sales revenue                                                                                  -                    25

Expenses:

     Administrative expenses                                                              (1,831)               (1,370)
     Pre-licence costs                                                                      (101)                 (160)
     Share-based payments                                                                   (499)                 (436)
     Change in fair value of share warrants                                                     -                 1,836
     Depletion, depreciation & amortisation                                                  (26)                  (10)

Operating loss before finance revenue and taxation                                        (2,457)                 (115)

Finance revenue                                                                               862                 1,152

(Loss)/profit before taxation                                                             (1,595)                 1,037

     Taxation charge                                                                            -                     -

(Loss)/profit for the period                                                              (1,595)                 1,037

Basic and diluted loss per share                                                           (0.01)                     -
Basic and diluted earnings per share                                                            -                  0.01


(1) As restated - see note 5 of the financial statements


Revenues from oil and gas production are recognised on the basis of the
Company's net working interest in its properties and, in 2006, were generated
from Serica's 10% interest in the Harimau producing gas and gas condensate
field. The Q1 2006 revenues are from discontinued operations following the
disposal of the Lematang PSC interest in 2006 which included the Harimau field.
Direct operating costs for the field during the period of ownership by the Group
were carried by Medco Energi Limited.



Administrative expenses of US$1.8 million for Q1 2007 increased from US$1.4
million for Q1 2006.  The increase reflects the growing scale of the Company's
activities over the past twelve months.



Pre-licence costs include direct cost and allocated general administrative cost
incurred on oil and gas interests prior to the award of licences, concessions or
exploration rights.



Share-based payment charges of US$0.5 million reflect share option grants made
and compare with US$0.4 million for Q1 2006. The increase is due to share
options granted to employees in early 2007.



The change in fair value of share warrants in Q1 2006 is a restatement to
reflect evolving interpretation of the treatment of such instruments under the
recently adopted International Financial Reporting Standards. This has arisen
due to the difference in the denominated currency of the warrants compared to
Serica's functional currency. The gain in Q1 2006 was created as the fair value
liability of warrants not exercised decreased due to the fall in share price
over the quarter. This has no cash impact on reported results. More detail is
provided in note 5 of the financial statements.



Negligible depletion, depreciation and amortisation charges in both periods
represent office equipment and fixtures and fittings.  The costs of petroleum
and natural gas properties are not currently subject to such charges pending
further evaluation.



Finance revenue, comprising interest income of US$0.9 million for Q1 2007
compares with US$1.2 million for Q1 2006.  The decrease from last year is due to
the reduction in cash deposit balances held during 2006 as expenditure was
incurred on the drilling programmes.



The net loss per share of US$0.01 for Q1 2007 compares to an earnings per share
of US$0.01 for Q1 2006.


Summary of Quarterly Results


                                                         2007           2006           2006           2006         2006
Quarter ended:                                         31 Mar         31 Dec         30 Sep         30 Jun       31 Mar
                                                       US$000         US$000         US$000         US$000       US$000


Sales revenue                                               -              -              -             36           25
(Loss)/profit for the quarter (1)                     (1,595)       (13,456)        (3,795)          1,839        1,037
Basic and diluted loss per share US$ (1)               (0.01)         (0.09)         (0.03)              -            -
Basic and diluted earnings per share (1)                    -              -              -           0.01         0.01



(1) As restated for Q1 and Q2 2006 - See note 5 of the financial statements



The fourth quarter 2006 loss includes asset write offs of US$12.7 million in
regard to the Asahan Offshore PSC. The second quarter 2006 profit includes a
gain of US$2.3 million from the disposal of the 10% interest in the Lematang
Block.



Working Capital, Liquidity and Capital Resources



Current Assets and Liabilities



An extract of the balance sheet detailing current assets and liabilities is
provided below:


                                                                              31 March                 31 December 2006
                                                                                  2007
                                                                                US$000                           US$000
Current assets:
    Inventories                                                                  6,785                            6,785
    Trade and other receivables                                                 11,369                           30,903
    Cash and cash equivalents                                                   72,175                           77,306
Total Current assets                                                            90,329                          114,994

Less Current liabilities:
   Trade and other payables                                                   (11,864)                         (30,619)


Net Current assets                                                              78,465                           84,375



At 31 March 2007, the Company had net current assets of US$78.5 million which
comprised current assets of US$90.3 million less current liabilities of US$11.8
million, giving an overall reduction in working capital of US$5.9 million in the
period. Net outgoings in 2007 covered operational expenses and exploration work.




Inventories principally consist of steel casing for the forthcoming Indonesian
drilling programme.



Trade and other receivables at 31 March 2007 include recoverable amounts from
partners in Joint Venture operations. Other smaller items include prepayments
and sundry UK and Indonesian working capital balances. A large decrease during
Q1 2007 from US$30.9 million to US$11.4 million occurred as significant
recoverable amounts due from partners in relation to 2006 Joint Venture
operations were settled, and the US$5.0 million proceeds due from the Lematang
PSC disposal were received.



Trade and other payables chiefly include amounts due to those sub-contractors
operating the UK drilling programme, trade creditors and accruals from
Indonesia, and also US$2.6 million payable for Norwegian data costs incurred
following the recent licence award. Payables arising from the 2006 drilling
campaign have been settled in Q1 2007.



Long-Term Assets and Liabilities



An extract of the balance sheet detailing long-term assets and liabilities is
provided below:


                                                                                   31 March                 31 December
                                                                                       2007                        2006
                                                                                     US$000                      US$000

Intangible exploration assets                                                        45,738                     40,681
Property, plant and equipment                                                           316                         342
Goodwill                                                                              1,200                       1,200
Long-term other receivables                                                             668                         351

Deferred income tax liabilities                                                       (955)                       (955)



During Q1 2007, total investments in petroleum and natural gas properties,
represented by intangible exploration assets, increased by US$5.0 million to
US$45.7 million.  Of the 2007 investments; US$2.7 million was spent in Norway on
seismic data, US$0.5 million in the UK on exploration work and G&A, US$2.6
million was spent in Indonesia principally on a Kutai signature bonus, drilling
activity preparation, exploration work and G&A on the Biliton and Glagah Kambuna
concessions, and US$0.2 million in Spain. US$1.0 million of back costs, received
in Q1 2007 as part of the Biliton farm out, have been credited against the
capitalised pool of costs.



Property, plant and equipment includes office fixtures and fittings and computer
equipment.



Goodwill, representing the difference between the price paid on acquisitions and
the fair value applied to individual assets, remained unchanged at US$1.2
million.



Long-term other receivables of US$0.7 million represent value added tax ('VAT')
on Indonesian capital spend, which would be recovered from future production.



Shareholders' Equity



An extract of the balance sheet detailing shareholders' equity is provided
below:


                                                                                31 March                    31  December

                                                                                    2007                            2006
                                                                                  US$000                          US$000

Total share capital                                                              157,817                         157,283
Other reserves                                                                    12,226                          11,767
Accumulated deficit                                                             (44,651)                        (43,056)



Total share capital includes the total net proceeds (both nominal value and any
premium on the issue of equity capital).



Issued share capital during 2007 was increased by the exercise of 493,334 share
options of the Company at prices ranging from Cdn$1.11 to Cdn$2.00.



Other reserves include amounts credited in respect of cumulative share-based
payment charges, and the amount of the fair value liability of share purchase
warrants eliminated upon exercise of those warrants. The increase in other
reserves from US$11.8 million to US$12.2 million reflects the amortisation of
share-based payment charges in Q1 2007.



Capital Resources



At 31 March 2007, Serica had US$79.3 million of net working capital and no
long-term debt.  At that date the Company had commitments to future minimum
payments under operating leases in respect of rental office premises, office
equipment and motor vehicles for each of the following periods/years as follows:


                                                                         US$000

31 December 2007                                                            258
31 December 2008                                                            287
31 December 2009                                                            266
31 December 2010                                                             42



At 31 March 2007 the Company had no long-term debt or capital lease obligations.
In Q4 2006 the Company contracted the Seadrill-5 jack-up drilling rig for 136
days during 2007 for Indonesia operations at a gross cost of US$26,286,000. The
gross obligation existed at 31 March 2007, Serica's net share of these costs
will depend on the exact split of the proposed drilling programmes but following
the farm-out of a 45% interest in Biliton and current paying interests in the
Glagah Kambuna TAC, this is expected to be approximately US$11,100,000. In Q1
2007 the company contracted the Sedco 704 semi-submersible drilling rig for UK
operations, specifically the Columbus appraisal wells. The gross obligation
under the contract is for 94 days which equates to a value of US$32,200,000, of
which Serica's share is expected to be 25%, depending upon the work programme
finally agreed with the Company's co-venturers.



In the absence of revenues generated from oil and gas production, Serica will
utilise existing financial resources as required to fund its investment
programme and ongoing operations.



Off-balance Sheet Arrangements



The Company has not entered into any off-balance sheet transactions or
arrangements.



Critical Accounting Estimates



The Company's principal accounting policies are detailed in note 2 to the
attached financial statements.  International Financial Reporting Standards have
been adopted. The cost of exploring for and developing petroleum and natural gas
reserves are capitalised.  Unproved properties are subject to periodic
impairment tests whilst the costs of proved properties are depleted over the
life of such producing fields.  In each case, calculations are based upon
management assumptions about future outcomes, product prices and performance.



Financial Instruments



The Group's financial instruments comprise cash and cash equivalents, accounts
payable and accounts receivable. It is the management's opinion that the Group
is not exposed to significant currency, interest or credit risks arising from
its financial instruments other than as discussed below:



Cash and cash equivalents, which comprise short-term cash deposits, are
generally held within the currency of likely future expenditures to minimise the
impact of currency fluctuations. The majority of funds are currently held in US
dollars to match the Group's exploration and appraisal commitments. The holding
of £1.2 million at the period end reflected a proportion of UK licence
commitments and administrative expenditures expected in £ Sterling.



Serica has exposure to interest rate fluctuations; given the level of
expenditure plans over 2007/8 this is managed in the short-term through
selecting treasury deposit periods of one to six months. Cash and treasury
credit risks are mitigated through spreading the placement of funds over a range
of institutions each carrying acceptable published credit ratings to minimise
counterparty risk.



Where Serica operates joint ventures on behalf of partners it seeks to recover
the appropriate share of costs from these third parties. The majority of
partners in these ventures are well established oil and gas companies. In the
event of non payment, operating agreements typically provide recourse through
increased venture shares.



It is the management's opinion that the fair value of its financial instruments
approximate to their carrying values, unless otherwise noted.



Share Options



As at 31 March 2007, the following director and employee share options were
outstanding: -
                                                              Expiry Date                Amount           Exercise cost
                                                                                                                   Cdn$

Share options                                                    Jun 2008               400,000                 720,000
                                                                 Aug 2009               100,000                 110,000
                                                                 Feb 2009               697,499               1,394,998
                                                                 May 2009               100,000                 200,000
                                                                 Dec 2009               325,000                 325,000
                                                                 Jan 2010               600,000                 600,000
                                                                 Jun 2010             1,200,000               2,160,000

                                                                                                          Exercise cost
                                                                                                                      £

                                                                 Nov 2010               671,000                 650,870
                                                                 Jan 2011             1,275,000               1,319,625
                                                                 May 2011               180,000                 172,800
                                                                June 2011               270,000                 259,200
                                                                 Nov 2011               120,000                 134,400
                                                                 Jan 2012             1,056,000               1,082,400

Business Risk and Uncertainties



Serica, like all exploration companies in the oil and gas industry, operates in
an environment subject to inherent risks.  Many of these risks are beyond the
ability of a company to control, particularly those associated with the
exploring for and developing of economic quantities of hydrocarbons: volatile
commodity prices; governmental regulations; and environmental matters.



Disclosure Controls and Procedures and Internal Controls over Financial
Reporting



Serica's management, including the Chief Executive Officer and Chief Financial
Officer, has reviewed and evaluated the effectiveness of the Company's
disclosure controls and procedures (as defined in Multilateral Instrument 52-109
of the Canadian Securities Administrators) as of 31 March 2007. Management has
concluded that, as of 31 March 2007, the disclosure controls and procedures were
effective to provide reasonable assurance that material information relating to
the Company and its consolidated subsidiaries would be made known to them by
others within those entities, particularly during the period in which this
report was being prepared.



Management has designed internal controls over financial reporting to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
IFRS. There have been no changes in the Company's internal controls over
financial reporting during the period that have materially affected, or are
reasonably likely to materially affect, the Company's internal controls over
financial reporting.



Nature and Continuance of Operations



The principal activity of the Company is to identify, acquire and subsequently
exploit oil and gas reserves primarily in Asia and Europe.



The Company's financial statements have been prepared with the assumption that
the Company will be able to realise its assets and discharge its liabilities in
the normal course of business rather than through a process of forced
liquidation.  The Company currently has no operating revenues and, during the
period ended 31 March 2007 the Company incurred losses of US$1.6 million from
continuing operations.  At 31 March 2007 the Company held cash and cash
equivalents of US$72.2 million.



Outstanding Share Capital



As at 20 April 2007, the Company had 151,031,289 ordinary shares issued and
outstanding.



Additional Information



Additional information relating to Serica can be found on the Company's website
at www.serica-energy.com and on SEDAR at www.sedar.com



Approved on Behalf of the Board




Paul Ellis                                            Christopher Hearne
Chief Executive Officer                               Finance Director

1 May 2007

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.


The TSX Venture Exchange has not reviewed and does not accept responsibility for
                   the adequacy or accuracy of this release.

 To receive Company news releases via email, please contact [e-mail] and
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Serica Energy plc

Group Income Statement

for the period ended 31 March 2007


                                                                                                   Q1                Q1
                                                                                                 2007              2006
                                                                                               US$000            US$000
                                                                                          (Unaudited)       (Unaudited)

Sales revenue                                                                                       -                25

Cost of sales                                                                                       -                 -

Gross profit                                                                                        -                25

Administrative expenses                                                                       (1,831)           (1,370)
Pre-licence costs                                                                               (101)             (160)
Share-based payments                                                                            (499)             (436)
Change in fair value of share warrants (1)                                                          -             1,836
Depreciation, depletion and amortisation                                                         (26)              (10)

Operating loss before finance revenue and tax                                                 (2,457)             (115)

Finance revenue                                                                                   862             1,152
(Loss)/profit before taxation                                                                 (1,595)             1,037

Taxation charge for the period                                                                      -                 -

(Loss)/profit for the period                                                                  (1,595)             1,037

(Loss)/earnings per ordinary share (US$):
Basic and diluted LPS                                                                          (0.01)               N/A
Basic and diluted EPS (1)                                                                         N/A              0.01



(1) As restated - See note 5

Serica Energy plc

Consolidated Balance Sheet



                                                                                          31 March          31 December
                                                                                              2007                 2006
                                                  Notes                                     US$000               US$000
                                                                                       (Unaudited)            (Audited)

Intangible exploration assets                                                               45,738               40,681
Property, plant and equipment                                                                  316                  342
Goodwill                                                                                     1,200                1,200
Investments in subsidiaries                                                                      -                    -
Other receivables                                                                              668                  351
                                                                                            47,922               42,574

Inventories                                                                                  6,785                6,785
Trade and other receivables                                                                 11,369               30,903
Cash and cash equivalents                                                                   72,175               77,306
                                                                                            90,329              114,994

TOTAL ASSETS                                                                               138,251              157,568

Current liabilities
Trade and other payables                                                                  (11,864)             (30,619)

Non-current liabilities
Other payables                                                                                   -                    -
Deferred income tax liabilities                                                              (955)                (955)

TOTAL LIABILITIES                                                                         (12,819)             (31,574)

NET ASSETS                                                                                 125,432              125,994


Share capital                                          3                                   157,817              157,283
Other reserves                                                                              12,266               11,767
Accumulated deficit                                                                       (44,651)             (43,056)

TOTAL EQUITY                                                                               125,432              125,994



Serica Energy plc

Statement of Changes in Equity

For the period ended 31 March 2007


Group                                                Share capital         Other       Deficit         Total
                                                                        reserves
                                                            US$000        US$000        US$000        US$000

At 1 January 2006                                          148,745        4,153       (28,681)       124,217

Conversion of warrants                                       8,530            -             -          8,530
Conversion of options                                           35            -             -             35
Issue of shares (net)                                         (27)            -             -           (27)
Share-based payments                                             -        1,918             -          1,918
Loss for the year                                                -            -       (14,375)      (14,375)
Fair value of warrants converted                                 -        5,696              -         5,696

At 1 January 2007                                          157,283       11,767       (43,056)       125,994

Conversion of options                                          534            -             -            534
Share-based payments                                             -          499             -            499
Loss for the period                                              -            -        (1,595)       (1,595)

At 31 March 2007                                           157,817        12,266      (44,651)       125,432



Serica Energy plc

Consolidated Cash Flow Statement

For the period ended 31 March 2007
                                                                                                   Q1                Q1
                                                                                                 2007              2006
                                                                                               US$000            US$000
                                                                                          (Unaudited)       (Unaudited)

Cash flows from operating activities:
Operating loss                                                                                (2,457)             (115)

Adjustments for:
Depreciation, depletion and amortisation                                                           26                20
Share-based payments                                                                              499               436
Change in fair value of share warrants                                                              -           (1,836)
Changes in working capital                                                                    (4,978)           (3,333)
Cash generated from operations                                                                (6,910)           (4,828)

Taxes received                                                                                      -                34

Net cash outflow from operations                                                              (6,910)           (4,794)

Cash flows from investing activities:
Interest received                                                                                 862             1,152
Proceeds from disposals                                                                         5,000                 -
Purchases of property, plant and equipment                                                          -             (298)
Purchases of intangible exploration assets - net                                              (4,617)             (828)

Net cash generated/(used) in investing activities                                               1,245                26

Cash proceeds from financing activities:
Proceeds on exercise of warrants/options                                                          534               119

Net cash from financing activities                                                                534               119


Net decrease in cash and cash equivalents                                                     (5,131)           (4,649)
Cash and cash equivalents at start of period                                                   77,306           109,750

Cash and cash equivalents at end of period                                                     72,175           105,101



Serica Energy plc


Notes to the Unaudited Consolidated Financial Statements


1.     Nature and continuance of operations



Serica Energy plc is a public limited company incorporated and domiciled in
England & Wales. The Company's ordinary shares are traded on AIM and the TSXV.
The principal activity of the Company is to identify, acquire and exploit oil
and gas reserves.



2. Accounting Policies



Basis of Preparation



These unaudited interim consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting Standards
following the same accounting policies and methods of computation as the
consolidated financial statements for the year ended 31 December 2006. These
unaudited interim consolidated financial statements do not include all the
information and footnotes required by generally accepted accounting principles
for annual financial statements and therefore should be read in conjunction with
the consolidated financial statements and the notes thereto in the Serica Energy
plc annual report for the year ended 31 December 2006.



The Group and Company financial statements are presented in US dollars and all
values are rounded to the nearest thousand dollars (US$000) except when
otherwise indicated.



Basis of Consolidation



The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries Serica Energy Corporation, Serica Energy Holdings
B.V., Asia Petroleum Development Limited, Petroleum Development Associates
(Asia) Limited, Serica Energia Iberica S.L., Firstearl Limited, Serica Energy
(UK) Limited, PDA Lematang Limited, APD (Asahan) Limited, APD (Biliton) Limited,
APD (Glagah Kambuna) Limited and Serica Energy Pte Limited, Serica Kutei B.V.
and Serica Nam Con Son B.V. Together these comprise the 'Group'.



All inter-company balances and transactions have been eliminated upon
consolidation.



3.  Equity Share Capital
                                                      31 March       31 March          31 December          31 December
                                                          2007           2007                 2006                 2006
                                                        Number         US$000               Number               US$000
Authorised:
Ordinary shares of US$0.10                         200,000,000         20,000          200,000,000               20,000
Ordinary 'A' share of £50,000                                1             90                    1                   90
                                                   200,000,001         20,090          200,000,001               20,090



On incorporation, the authorised share capital of the Company was £50,000 and
US$20,000,000 divided into one 'A' share of £50,000 and 200,000,000 ordinary
shares of US$0.10 each, two of which were issued credited as fully paid to the
subscribers to the Company's memorandum of association.



The balance classified as total share capital includes the total net proceeds
(both nominal value and share premium) on issue of the Group and Company's
equity share capital, comprising US$0.10 ordinary shares.


Allotted, issued and fully paid:                                               Share          Share               Total
                                                                             capital        premium       Share capital
Group                                                          Number         US$000         US$000              US$000

At 1 January 2007                                         150,537,956         15,144        142,139             157,283

Options exercised (1)                                         493,334             49            485                 534

As at 31 March 2007                                       151,031,290         15,193        142,624             157,817



(1) From 1 January 2007 until 31 March 2007, 493,334 share options were
converted to ordinary shares at prices ranging from Cdn$1.11 to Cdn$2.00.



4.  Share-Based Payments



Share Option Plans



Following a reorganisation (the 'Reorganisation') in 2005, the Company
established an option plan (the 'Serica 2005 Option Plan') to replace the Serica
Energy Corporation Share Option Plan (the 'SEC Share Option Plan').



Serica Energy Corporation ('Serica BVI') was previously the holding company of
the Group but, following the Reorganisation, is now a wholly owned subsidiary of
the Company. Prior to the Reorganisation, Serica BVI issued options under its
option plan (the 'Serica BVI Option Plan') and following the Reorganisation the
Company has agreed to issue ordinary shares to holders of Serica BVI Options
already awarded upon exercise of such options in place of the shares in Serica
BVI to which they would be entitled. There are currently options outstanding
under the Serica BVI Option Plan entitling holders to acquire up to an aggregate
of 3,422,499 ordinary shares of the Company. No further options will be granted
under the Serica BVI option plan.



The Company has granted 3,717,000 options under the Serica 2005 Option Plan,
3,572,000 of which are currently outstanding. The Serica 2005 Option Plan will
govern all future grants of options by the Company to Directors, officers, key
employees and certain consultants of the Group.



The Serica 2005 Option Plan is comprised of two parts, the basic share option
plan and a part which constitutes an Enterprise Management Incentive Plan ('EMI
Plan') under rules set out by the H.M. Revenue & Customs in the United Kingdom.
Options granted under the Serica 2005 Option Plan can be granted, at the
discretion of the Board, under one or other of the two parts but, apart from
certain tax benefits which can accrue to the Company and its UK employees if
options are granted under the part relating to the EMI Plan meeting the
conditions of that part of the Serica 2005 Option Plan, all other terms under
which options can be awarded under either part are substantially identical.



The Directors intend that the maximum number of ordinary shares which may be
utilised pursuant to the Serica 2005 Option Plan will not exceed 10 per cent. of
the issued ordinary shares of the Company from time to time, in line with the
recommendations of the Association of British Insurers.



In December 2005, 330,000 options were awarded to executive directors
exercisable only if certain performance targets are met. The Company calculates
the value of share-based compensation using a Black-Scholes option pricing model
(or other appropriate model for those Directors' options subject to certain
market conditions) to estimate the fair value of share options at the date of
grant. The estimated fair value of options is amortised to expense over the
options' vesting period. US$499,000 has been charged to the income statement in
the period ended 31 March 2007 and a similar amount credited to other reserves.



The assumptions made for the options granted during 2005 and 2006 include a
volatility factor of expected market price of 50%, a weighted average risk-free
interest rate of 6%, no dividend yield and a weighted average expected life of
options of three years.



The following table illustrates the number and weighted average exercise prices
(WAEP) of, and movements in, share options during the period:


                                                                                              Number         WAEP Cdn$
Serica BVI option plan

Outstanding at 31 December 2006                                                            3,975,833              1.57

Exercised during the period                                                                (493,334)              1.26
Cancelled during the period                                                                 (60,000)              2.00

Outstanding at 31 March 2007                                                               3,422,499              1.61

Serica 2005 Option Plan                                                                                              £

Outstanding at 31 December 2006                                                            2,516,000              1.01

Granted during the period                                                                  1,056,000              1.02

Outstanding at 31 March 2007                                                               3,572,000              1.01


5.  Retrospective Restatement



In the 2006 Annual Report, the prior year income statement and balance sheet
have been adjusted to reflect differences in accounting for share warrants that
were outstanding at 31 December 2005 as a liability, carried at fair value.
Previously the warrants were considered to qualify for treatment as equity under
IAS 32 Financial Instruments: Presentation. However, precedents now available
indicate that, because the conversion proceeds were denominated in Can$, and the
company's functional currency is US$, these instruments should have been treated
more appropriately as a liability for the period the warrants remained
outstanding, with an income statement charge/credit made to reflect the movement
in the fair value of the warrants in each relevant period. All warrants were
exercised during 2006. The effect of this non cash adjustment on the Group
Income statement, Loss per Ordinary Share, Group and Company Balance Sheets, and
Group and Company Statements of Changes in Equity is detailed in Note 30 of the
2006 Annual Report.



The impact of this retrospective restatement on the Q1 2006 comparatives in this
Q1 2007 Report is set out below:


Effect on Group Income Statement and Summary of Quarterly Results in Managements Discussion and Analysis


(Loss)/profit for the quarter

Quarter ended:                                                                                     31 Mar        30 Jun

2006
(Loss)/profit for the quarter previously reported (US$000)                                          (799)         2,521
Change in fair value of warrants (US$000)                                                           1,836         (682)

Profit for the quarter restated (US$000)                                                            1,037         1,839

(Loss)/earnings per share
2006
Basic and diluted loss per share previously reported (US$)                                         (0.01)             -
Basic and diluted earnings per share previously reported (US$)                                          -          0.02

Change in fair value of warrants (US$)                                                               0.02        (0.01)

Basic and diluted earnings per share as restated (US$)                                               0.01          0.01




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