Columbus Discovery Update
Serica Energy plc
07 June 2007
SERICA ENERGY TO RETAIN 50% INTEREST
IN NORTH SEA COLUMBUS DISCOVERY WELL
London, June 7, 2007 - Serica Energy (UK) Limited ('Serica') and BG
International Limited ('BG') have mutually agreed not to complete the
transaction, announced on November 14, 2006, under which Serica would have
exchanged a 25% interest in Block 23/16f (containing the Columbus discovery) for
a 25% interest in the neighbouring Block 23/31, operated by BG. Serica and BG
have agreed to continue to pursue the development of Columbus for their mutual
benefit and that of their respective co-venturers.
Serica, as Operator of Block 23/16f, will now retain its 50% interest in the
Block and in the Columbus discovery well and will press forward with appraisal
of the discovery and potential early development. Discussions have already
commenced with nearby infrastructure owners with a view to reaching a
development sanction decision by the end of the year in the event of a
successful outcome to appraisal drilling.
Serica has contracted the SEDCO 704 drilling rig to drill up to two Columbus
appraisal wells in Block 23/16f commencing in the third quarter of this year.
Paul Ellis, Chief Executive of Serica, said that,
'We are confident that, with the positive results already obtained from the
Columbus discovery well, the field is capable of rapid appraisal and development
and we intend to press ahead with this programme as a high priority,
particularly given our increased stake in the project.'
Background Notes:
Serica announced the results of the first well drilled on Columbus on 20th
December 2006. The well encountered a gross gas column of at least 125 feet in
the Palaeocene Forties sandstone. A total of 85 feet of the reservoir was tested
and the stabilised average production rates on a 56/64 inch choke during a five
hour period were 17.5 million cubic feet of gas per day and 1,060 barrels per
day of 47.5 degrees API condensate. The wellhead flowing pressure was 1,200
pounds per square inch and the inert gas content was less than 2%.
On the basis of an independent report carried out by RPS Energy Limited on
behalf of Serica following the drilling of the discovery well, the most likely
net contingent resources of oil equivalent lying in Block 23/16f attributable to
Serica's 50% interest are 10.8 million barrels. The purpose of the appraisal
wells to be drilled this year is to confirm the most likely resource figures and
investigate the potential upside to these figures, while obtaining the further
data required to refine the development concepts.
Serica's partners in Block 23/16f are Endeavour Energy UK Limited (25%) and EOG
Resources United Kingdom Limited (25%).
Enquiries:
Serica Energy plc
Paul Ellis, paul.ellis@serica-energy.com +44 (0)20 7487 7300
Chief Executive Officer
Chris Hearne, chearne@serica-energy.com +44 (0)20 7487 7300
Finance Director
JPMorgan Cazenove
Steve Baldwin steve.baldwin@jpmorgancazenove.com +44 (0)20 7588 2828
Pelham Public Relations
-UK
James Henderson james.henderson@pelhampr.com +44 (0)20 7743 6673
Alisdair
Haythornthwaite alisdair.haythornthwaite@pelhampr.com +44 (0)20 7743 6676
CHF - Canada
Jan Moir jan@chfir.com +1 416 868 1079
Kelly Cody kelly@chfir.com +1 416 868 1079
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.
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