LONDON, June 25 /CNW/ - 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."
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.
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.
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that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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