Serica Energy plc - ("Serica" or the "Company") - Third quarter 2007 report to shareholders



    LONDON, Nov. 14 /CNW/ - Serica Energy plc (TSX Venture & AIM: SQZ) today
announces its financial results for the three months ending 30 September 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.

    
    Q3 Highlights

    Operational
    -----------

      -  Appraisal of the UK North Sea Columbus discovery commenced with the
         spudding of the first appraisal well in September 2007, at a step
         out location three kilometres north of initial discovery well

           -  On 6 November 2007, the Company announced that it had drilled
              two successful appraisal wells, supporting the commercial
              development of the field

      -  Completed 3D seismic survey in Block 06/94, offshore Vietnam

      -  Farm out of 25% of four onshore licences in Spain agreed with Beach
         Petroleum Limited and seismic survey in progress

    Financial & Corporate
    ---------------------

      -  Commitment obtained for US$100 million debt facility to fund
         appraisal and development activities in Indonesia, UK and Norway
         from JPMorgan Chase Bank and Bank of Scotland in July 2007

      -  Ian Vann and Steven Theede joined the board as non-executive
         directors in July 2007

    Forward Drilling Programmes

      -  Global Santa Fe GSF 136 drilling rig contracted for the drilling of
         two wildcat high impact exploration wells in the Biliton PSC,
         Indonesia, in Q4 2007

         -  Following a farmout to Nations Energy, Serica will retain a 45%
            interest and Nations Energy will bear the majority of the
            drilling costs

      -  Kambuna development fully underway

         -  Production platform arrives on location in Q4 2007
         -  Three development wells to be completed during Q1 2008

      -  Appraisal well in the Bream field, Norway, due to be drilled in Q2
         2008
    


    Serica's Chief Executive, Paul Ellis commented:

    "The third quarter of 2007 has seen the start of a period of greatly
increased activity for Serica. The success of the two Columbus appraisal wells
underlines the potential of the field and supports its commercial development.
    "In Indonesia this month we shall start drilling the first of two
exploration wells in the Biliton PSC. These are located in virtually
unexplored territory and have significant upside potential with limited
downside financial risk to Serica due to the farm-out arrangements. The rig
will then move to the Kambuna gas field, as the Company targets first
production by the end of 2008.
    "Serica continues to focus on creating shareholder value through the
drillbit and has demonstrated this with its success at Columbus."


    
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        responsibility for the adequacy or accuracy of this release.

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                              SERICA ENERGY PLC

                  THIRD QUARTER 2007 REPORT TO SHAREHOLDERS
    



    MANAGEMENT OVERVIEW

    During the third quarter 2007, Serica completed preparations for its
drilling campaign in the UK North Sea and in Indonesia. The Company has
commenced an extensive programme including appraisal of the Company's Columbus
discovery in the UK North Sea, two exploration wells in the Biliton PSC
offshore Java, and development wells in the Kambuna field, offshore Sumatra.
    In July, Serica obtained a commitment from JPMorgan Chase Bank, N.A. and
The Governor and Company of the Bank of Scotland to enter into a US$100
million senior secured debt facility. The facility is subject to legal
documentation and fulfillment of standard terms and conditions for a debt
financing of this nature, including the approval of gas sales arrangements.
    The facility, which will have a term of twelve months, with the Company
having an option to extend for a further six months, will be used to fund
appraisal and development expenditures for the Kambuna field in Indonesia and
the Columbus field in the UK North Sea as well as for Norwegian appraisal
expenditure and general corporate purposes.
    Serica announced that Ian Vann and Steven Theede had joined the Board as
non-executive directors with effect from 1 July and 24 July 2007 respectively.
Mr Vann was employed by BP from 1976, and directed and led BP's global
exploration efforts from 1996 until his recent retirement in January 2007. Mr
Theede held senior management positions with Conoco, later ConocoPhillips, and
in 2000 was appointed President, Exploration and Production for Europe, Russia
and the Caspian region. In 2003 he joined Yukos Oil Company and became its
Chief Executive Officer in July 2004, a position he held until August 2006. In
October, Serica confirmed the retirement of James Steel as a non-executive
director of the Company.

    Western Europe: United Kingdom, Spain, Ireland and Norway

    UK North Sea
    Following Serica's 2006 Columbus discovery well 23/16f-11, in the UK
Central North Sea, appraisal drilling commenced in the third quarter 2007.
    As announced by Serica on 6 November 2007, two Columbus appraisal wells,
23/16f-12 and 23/16f-12z, were drilled and both were successful. The net
hydrocarbon pay was approximately 40 feet in well 12, 70 feet in well 12z and
56 feet in the discovery well. The results of these wells support the
commercial development of the Columbus field and Serica is studying various
options for the export of gas and condensate via nearby facilities.
    Serica operates Block 23/16f and holds a 50% interest in the licence.

    Spain
    Serica is currently carrying out a 330 kilometre 2D seismic survey on its
four onshore licences in Aragon Province, in the north-eastern part of the
country. Serica has entered into a contract with Beach Petroleum Limited under
which Serica will farm out a 25% interest in the licences and will retain a
75% interest and operatorship.

    Ireland
    Serica holds a 100% interest in Blocks 27/4, 27/5 west and 27/9 in the
Slyne Basin off the west coast of Ireland and is carrying out a 3D seismic
reprocessing project in order to confirm exploration well locations on several
large gas prospects that it has already identified. The blocks lie about 40 km
south of the Corrib gas field, currently under development by Shell.

    Norway
    In Serica's Norwegian North Sea licences, the operator of Licence 407, BG
Norge AS, is planning for an appraisal well to be drilled in the Bream field
in the second quarter of 2008 and the operator of Licence 406, Premier Oil
Norge AS, is planning a 3D seismic survey early in 2008. Serica has a 20%
interest in these licences.

    South East Asia:  Indonesia and Vietnam

    Indonesia
    The Global Santa Fe GSF 136 drilling rig has been contracted for the
drilling of two wildcat exploration wells in the Biliton PSC, located offshore
in a virtually unexplored basin in the central Java Sea, commencing in Q4
2007. If successful, these wells could demonstrate that the block contains
significant oil reserves and have a major impact on the Company. Serica will
operate the wells and retains a 45% interest following a farmout to Nations
Petroleum (Biliton) B.V., which will bear the majority of the costs of the
drilling programme.
    In the Glagah-Kambuna PSC offshore Sumatra, the development programme for
the Kambuna gas/condensate field is underway with first production planned for
the end of 2008. The field production platform has been built and will arrive
on location in Q4 2007, following which two development wells will be drilled
and the Kambuna No. 2 well will be recompleted. In addition, offshore and
onshore pipeline route surveys are in progress in preparation for the tender
for pipeline supply and installation, whilst negotiations for the sale of the
gas and condensate are expected to conclude in Q4 2007. Serica operates the
field and has a 65% interest.
    In the large Kutai PSC, East Kalimantan, an airborne elevation survey has
been completed in preparation for a 2D seismic survey to be carried out in the
onshore part of the PSC early next year. The existing offshore 3D seismic
survey data is to be reprocessed and plans for an additional 3D seismic survey
are being prepared. Serica operates the PSC and has a 52.5% interest.

    Vietnam
    The acquisition of a 780 square kilometre 3D seismic survey has been
completed in Block 06/94, in the Con Son Basin offshore Vietnam, in which
Serica has a 33.3% interest. The block lies immediately south of the producing
Lan Tay and Lan Do gas fields and immediately east of the Dua and Blackbird
oil discoveries.

    Forward Programme

    Serica is set for an extremely active period of exploration, appraisal
and development drilling with operations on six wells in the UK North Sea and
Indonesia over the next six months. In addition, seismic surveys are being
conducted in Spain and Vietnam, whilst preparations for 2008 drilling in
Norway and the UK are also underway.
    Following the results of the two Columbus appraisal wells, conceptual
development studies for the Columbus field are underway, as is engineering
design for the potential production off-take options. The development can now
be advanced, given the results of the appraisal programme.
    Serica remains very focused on creating shareholder value through its
exploration drilling and field development programmes. As the Company
continues to build on the exploration success that it has seen in the North
Sea and Indonesia, its objectives are to bring the benefits of that success
back to shareholders and to lay the foundations for future growth.
    The results of Serica's operations detailed below in the 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") contains information up to and including 12 November 2007 and
should be read in conjunction with the attached unaudited interim consolidated
financial statements for the period ended 30 September 2007. The interim
financial statements for the three and nine months ended 30 September 2007
have been prepared by and are the responsibility of the Company's management,
and have been reviewed by the Company's independent auditors. Comparative
information for the three and nine months ended 30 September 2006 has not been
reviewed by the auditors.
    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, commencing the appraisal of Columbus in the North Sea,
advancing the Indonesian development and preparing for the 2007 Indonesian
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 profit of US$1.2 million for the three months ended 30
September 2007 ("Q3 2007") compared to a loss of US$3.8 million for the three
months ended 30 September 2006 ("Q3 2006").

    

                                2007    2007    2007    2006    2006    2006
                              -----------------------------------------------
                                  Q3      Q2      Q1      Q3      Q2      Q1
                              US$000  US$000  US$000  US$000  US$000  US$000

    Sales revenue                  -       -       -       -      36      25
                              -----------------------------------------------

    Expenses:

      Administrative expenses (1,658) (1,728) (1,846) (1,415) (1,343) (1,322)
      Foreign exchange
       gain/(loss)                31     (36)     15     486     890     (48)
      Pre-licence costs          (76)   (124)   (101) (3,430)   (414)   (160)
      Relinquished licence
       costs                       -       -       -    (164)      -       -
      Share-based payments      (485)   (464)   (499)   (515)   (533)   (436)
      Change in fair value
       of share warrants(1)        -       -       -       -    (682)  1,836
      Depletion, depreciation
       & amortisation            (34)    (26)    (26)    (33)    (18)    (10)
                              -----------------------------------------------
    Operating loss before
     finance revenue and
     taxation                 (2,222) (2,378) (2,457) (5,071) (2,064)   (115)

      Profit on disposal           -       -       -       -   2,187       -
      Finance revenue            663     791     862   1,276   1,210   1,152
                              -----------------------------------------------

    (Loss)/profit before
     taxation                 (1,559) (1,587) (1,595) (3,795)  1,333   1,037

      Taxation credit/
       (charge)                2,796       -       -       -     506       -
                              -----------------------------------------------

    Profit/(loss) for
     the period                1,237  (1,587) (1,595) (3,795)  1,839   1,037

    Basic and diluted
     loss per share              N/A   (0.01)  (0.01)  (0.03)    N/A     N/A
    Basic and diluted
     earnings per share         0.01     N/A     N/A     N/A    0.01    0.01

    (1) As restated - see note 7 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 and Q2 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$1.7 million for Q3 2007 remained at a
consistent level with Q2 2007 and increased from US$1.4 million for the same
period last year. The increase reflects the growing scale of the Company's
activities over the past twelve months.
    No significant foreign exchange movements impacted Q3 2007 results. A
large foreign exchange gain of US$0.5 million was earned in Q3 2006. This
chiefly arose from the increase in US$ equivalent value of pounds sterling
cash deposits held, as the pound strengthened against the dollar during the
quarter.
    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. The expense of US$0.1 million for
Q3 2007 decreased from US$3.4 million for the same period last year when
significant cost was incurred on licence applications in Norway, Ireland and
Vietnam.
    Share-based payment charges of US$0.5 million reflect share option grants
made and compare with US$0.5 million for both Q2 2007 and Q3 2006. Whilst
further share options have been granted in 2007, the incremental charge
generated from those options has been offset by the decline in charge of the
options granted in 2005 and 2006.
    The change in fair value of share warrants in Q1 and Q2 2006 is a
restatement to reflect evolving interpretation of the treatment of such
instruments under the recently adopted IFRS. This has arisen due to the
difference in the denominated currency of the share warrants compared to
Serica's functional currency. The loss in Q2 2006 was created as the fair
value liability of share warrants not exercised increased due to the rise in
share price over the quarter. All warrants were exercised in 2006 and there is
no income statement impact in 2007. This has no cash impact on reported
results. More detail is provided in note 7 of the financial statements.
    Negligible depletion, depreciation and amortisation charges in all
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$0.7 million for Q3 2007
compares with US$0.8 million for Q2 2007 and US$1.3 million for Q3 2006. The
decrease from last year is due to the reduction in cash deposit balances held
since Q3 2006 as expenditure was incurred on the drilling programmes.
    The taxation credit in Q3 2007 represents expected tax recoveries on
Norwegian expenditure to date, partially offset by a deferred income tax
charge from the timing differences arising from capitalised exploration
expenditure.
    The net earnings per share of US$0.01 for Q3 2007 compares to a net loss
per share of US$0.03 for Q3 2006.

    
    Summary of Quarterly Results

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

    Sales revenue          -       -       -       -       -      36      25
    Profit/(loss) for
     the quarter(1)    1,237  (1,587) (1,595)(13,456) (3,795)  1,839   1,037
    Basic and diluted
     loss per
     share US$             -   (0.01)  (0.01)  (0.09)  (0.03)      -       -
    Basic and diluted
     earnings per
     share(1)           0.01       -       -       -       -    0.01    0.01
                      -------------------------------------------------------

    (1) As restated for Q1 and Q2 2006 - See note 7 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 Q2 2006 profit includes a gain of
US$2.2 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:

                                             30        30        31       31
                                      September      June     March December
                                           2007      2007      2007     2006
                                         US$000    US$000    US$000   US$000
                                      ---------------------------------------
    Current assets:
      Inventories                         5,411     6,438     6,785    6,785
      Trade and other receivables        14,165     7,147    11,369   30,903
      Cash and cash equivalents          45,564    56,622    72,175   77,306
                                      ---------------------------------------
    Total Current assets                 65,140    70,207    90,329  114,994

    Less Current liabilities:
      Trade and other payables           (6,051)   (4,413)  (11,864) (30,619)
                                      ---------------------------------------

    Net Current assets                   59,089    65,794    78,465   84,375
    

    At 30 September 2007, the Company had net current assets of US$59.1
million which comprised current assets of US$65.1 million less current
liabilities of US$6.1 million, giving an overall reduction in working capital
of US$6.7 million in the three month period.
    Inventories principally consist of steel casing for the forthcoming
Indonesian drilling programme. The reduction in balance of US$1.0 million
during Q3 2007 from US$6.4 million at 30 June 2007 to US$5.4 million arose as
a share of amounts now directly assigned to specific Indonesian projects was
recharged to partners.
    Trade and other receivables at 30 September 2007 totalled US$14.2
million, which includes a prepayment of US$5.8 million in respect of the
ongoing Columbus drilling programme, recoverable amounts from partners in
Joint Venture operations in the UK and Indonesia, and a tax recovery of
exploration expenditure from the Norwegian fiscal regime. Other smaller items
included prepayments and sundry UK and Indonesian working capital balances.
The increase in Q3 2007 of US$7.0 million to US$14.2 million was largely
caused by the ongoing Columbus operations and the recognition of the tax
recovery.
    Net cash outgoings in Q3 2007 covered a US$7.7 million payment to cover
UK rig commitments, operational expenses and other exploration work. These
were partially offset by US$0.7 million of interest income received in the
quarter.
    Trade and other payables of US$6.1 million at 30 September 2007 include
amounts due to those sub-contractors operating the UK drilling programme, and
creditors and accruals from Indonesia. Payables arising from the 2006 drilling
campaign were substantially settled in Q1 2007.

    Long-Term Assets and Liabilities
    --------------------------------

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

                                             30        30        31       31
                                      September      June     March December
                                           2007      2007      2007     2006
                                         US$000    US$000    US$000   US$000
                                     ----------------------------------------

    Intangible exploration assets        66,639    58,470    45,738   40,681
    Property, plant and equipment           411       327       316      342
    Goodwill                              1,200     1,200     1,200    1,200
    Long-term other receivables           3,121       527       668      351
    Deferred income tax liabilities      (3,375)     (955)     (955)    (955)
    


    During Q3 2007, total investments in petroleum and natural gas
properties, represented by intangible exploration assets, increased by US$8.2
million to US$66.6 million. The most significant expenditure was incurred on
the ongoing Columbus drilling (US$4.1 million), and of the remaining Q3 2007
investment in the UK & NW Europe; US$0.8 million related to Spain (US$0.5
million on a specific 2D seismic survey), US$0.6 million related to Norway,
US$0.6 million in the UK on exploration work and G&A. US$1.5 million was spent
in Indonesia principally on drilling activity preparation, exploration work
and G&A on the Glagah Kambuna and Kutai concessions, and US$0.6 million in
Vietnam. In Q1 2007, US$1.0 million of back costs, received 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$3.1 million are represented by a tax
recovery of exploration from the Norwegian fiscal regime, and value added tax
("VAT") on Indonesian capital spend, which would be recovered from future
production.
    The deferred income tax liability increase of US$2.4 million from US$1.0
million to US$3.4 million, occurred from timing differences arising following
the recognition of the long term Norwegian tax recovery asset.

    Shareholders' Equity
    --------------------

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

                                             30        30        31       31
                                      September      June     March December
                                           2007      2007      2007     2006
                                         US$000    US$000    US$000   US$000
                                      ---------------------------------------

    Total share capital                 158,871   158,871   157,817  157,283
    Other reserves                       13,215    12,730    12,226   11,767
    Accumulated deficit                 (45,001)  (46,238)  (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
1,110,001 share options of the Company at prices ranging from Cdn$1.00 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 warrants eliminated upon exercise of those share warrants. The increase
in other reserves from US$12.7 million to US$13.2 million reflects the
amortisation of share-based payment charges in Q3 2007.

    Capital Resources
    -----------------

    At 30 September 2007, Serica had US$59.1 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         86
    31 December 2008        287
    31 December 2009        266
    31 December 2010         42

    At 30 September 2007, the Company had no long-term debt or capital lease
obligations. In Q3 2007 the Company contracted the GSF 136 jack-up drilling
rig for a minimum of 120 days during 2007 and early 2008 for Indonesian
operations at a gross cost of US$22.2 million. 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$10.1 million.
    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$32.2 million, of which Serica's share is expected to be 50%, 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 its existing cash balances, together with the recently arranged
US$100 million senior secured debt facility, to fund the immediate needs of
its investment programme and ongoing operations and will supplement these
existing financial resources as needed.

    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:

    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 30 September 2007, the following director and employee share
options were outstanding:

    
                                   Expiry Date         Amount  Exercise cost
                                                                        Cdn$
    Share options                     Jun 2008        400,000        720,000
                                      Feb 2009        247,499        494,998
                                      May 2009        100,000        200,000
                                      Dec 2009        275,000        275,000
                                      Jan 2010        600,000        600,000
                                      Jun 2010      1,100,000      1,980,000

                                                               Exercise cost
                                                                   pnds stlg
                                      Nov 2010        561,000        544,170
                                      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      1,077,120
                                      May 2012        405,000        421,200
                                   August 2012      1,200,000      1,182,000
    

    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 in accordance with Multilateral
Instrument 52-109 and Canadian securities regulations as of 30 September 2007.
Management has concluded that, as of 30 September 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 three month period ended 30 September 2007, the Company earned a
profit of US$1.2 million from continuing operations. At 30 September 2007, the
Company held cash and cash equivalents of US$45.6 million.

    Outstanding Share Capital

    As at 12 November 2007, the Company had 151,647,957 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
    

    14 November 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 there from.

    
        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
        kelly@chfir.com and specify "Serica press releases" in the
                                subject line.


    Serica Energy plc

    Group Income Statement

    Unaudited                            Three     Three      Nine      Nine
                                        months    months    months    months
                                         ended     ended     ended     ended
                                        30 Sep    30 Sep    30 Sep    30 Sep
                                          2007      2006      2007    2006(1)
                                Notes   US$000    US$000    US$000    US$000

    Sales revenue                            -         -         -        61

    Cost of sales                            -         -         -         -
                                       --------------------------------------
    Gross profit                             -         -         -        61

    Administrative expenses             (1,658)   (1,415)   (5,232)   (4,080)
    Foreign exchange (loss)/gain            31       486        10     1,328
    Pre-licence costs                      (76)   (3,430)     (301)   (4,004)
    Relinquished licence costs               -      (164)        -      (164)
    Share-based payments                  (485)     (515)   (1,448)   (1,484)
    Change in fair value of share
     warrants                                -         -         -     1,154
    Depreciation, depletion &
     amortisation                          (34)      (33)      (86)      (61)
                                       --------------------------------------
    Operating loss before finance
    revenue and tax                     (2,222)   (5,071)   (7,057)   (7,250)

    Profit on disposal             6         -         -         -     2,187
    Finance revenue                        663     1,276     2,316     3,638
                                       --------------------------------------
    Loss before taxation                (1,559)   (3,795)   (4,741)   (1,425)

    Taxation credit for the period 6     2,796         -     2,796       506
                                       --------------------------------------
    Profit/(loss) for the period         1,237    (3,795)   (1,945)     (919)
                                       --------------------------------------
                                       --------------------------------------

    Loss per ordinary share (US$):
    Basic and diluted earnings per
     share                                0.01       N/A       N/A       N/A
    Basic and diluted loss per share       N/A     (0.03)    (0.01)    (0.01)

    (1) As restated - See note 7



    Serica Energy plc
    Consolidated Balance Sheet

                                       30 Sept   30 June  31 March    31 Dec
                                          2007      2007      2007      2006
                                        US$000    US$000    US$000    US$000
                                          (Un-      (Un-      (Un-
                                Notes  audited)  audited)  audited) (Audited)

    Non-current assets
    Intangible exploration assets       66,639    58,470    45,738    40,681
    Property, plant and equipment          411       327       316       342
    Goodwill                             1,200     1,200     1,200     1,200
    Other receivables                    3,121       527       668       351
                                       --------------------------------------
                                        71,371    60,524    47,922    42,574
                                       --------------------------------------
    Current assets
    Inventories                          5,411     6,438     6,785     6,785
    Trade and other receivables         14,165     7,147    11,369    30,903
    Cash and cash equivalents           45,564    56,622    72,175    77,306
                                       --------------------------------------
                                        65,140    70,207    90,329   114,994
                                       --------------------------------------

    TOTAL ASSETS                       136,511   130,731   138,251   157,568
                                       --------------------------------------

    Current liabilities
    Trade and other payables            (6,051)   (4,413)  (11,864)  (30,619)

    Non-current liabilities
    Deferred income tax liabilities     (3,375)     (955)     (955)     (955)

                                       --------------------------------------
    TOTAL LIABILITIES                   (9,426)   (5,368)  (12,819)  (31,574)
                                       --------------------------------------

    NET ASSETS                         127,085   125,363   125,432   125,994
                                       --------------------------------------
                                       --------------------------------------

    Share capital                  4   158,871   158,871   157,817   157,283
    Other reserves                      13,215    12,730    12,266    11,767
    Accumulated deficit                (45,001)  (46,238)  (44,651)  (43,056)

                                       --------------------------------------
    TOTAL EQUITY                       127,085   125,363   125,432   125,994
                                       --------------------------------------
                                       --------------------------------------



    Serica Energy plc
    Statement of Changes in Equity
    For the period ended 30 September 2007

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

    At 1 January 2007 (audited)        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 (unaudited)       157,817    12,266   (44,651)  125,432

    Conversion of options                1,054         -         -     1,054
    Share-based payments                     -       464         -       464
    Loss for the period                      -         -    (1,587)   (1,587)
                                       --------------------------------------
    At 30 June 2007 (unaudited)        158,871    12,730   (46,238)  125,363

    Share-based payments                     -       485         -       485
    Loss for the period                      -         -     1,237     1,237
                                       --------------------------------------
    At 30 September 2007 (unaudited)   158,871    13,215   (45,001)  127,085
                                       --------------------------------------
                                       --------------------------------------


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

    At 1 January 2006 (audited)        148,745     4,153   (28,681)  124,217
    Conversion of warrants                 119         -         -       119
    Share-based payments                     -       436         -       436
    Profit for the period                    -         -     1,037     1,037
    Fair value of warrants converted         -        70         -        70
                                       --------------------------------------
    At 31 March 2006 (unaudited)       148,864     4,659   (27,644)  125,879
    Conversion of warrants               2,282         -         -     2,282
    Share issue costs                      (27)        -         -       (27)
    Share-based payments                     -       533         -       533
    Profit for the period                    -         -     1,839     1,839
    Fair value of warrants converted         -     1,337         -     1,337
                                       --------------------------------------
    At 30 June 2006 (unaudited)        151,119     6,529   (25,805)  131,843
    Conversion of warrants               6,164                         6,164
    Share-based payments                     -       515         -       515
    Loss for the period                      -              (3,795)   (3,795)
    Fair value of warrants converted         -     4,289         -     4,289
                                       --------------------------------------
    At 30 September 2006 (unaudited)   157,283    11,333   (29,600)  139,016
                                       --------------------------------------
                                       --------------------------------------



    Serica Energy plc
    Consolidated Cash Flow Statement

    Unaudited                            Three     Three      Nine      Nine
                                        months    months    months    months
                                         ended     ended     ended     ended
                                       30 Sept   30 Sept   30 Sept   30 Sept
                                          2007      2006      2007      2006
                                        US$000    US$000    US$000    US$000

    Cash flows from operating
     activities:
    Operating loss                      (2,222)   (5,071)   (7,057)   (7,250)

    Adjustments for:
    Depreciation, depletion and
     amortisation                           34        33        86        61
    Relinquished licence costs               -       164         -       164
    Fair value of share warrants             -         -         -    (1,154)
    Share-based payments                   485       515     1,448     1,484
    Changes in working capital          (3,785)   (2,561)   (8,815)   (6,833)
                                       --------------------------------------
    Cash generated from operations      (5,488)   (6,920)  (14,338)  (13,528)

    Taxes received                           -         -         -        34

                                       --------------------------------------
    Net cash flow from operations       (5,488)   (6,920)  (14,338)  (13,494)
                                       --------------------------------------

    Cash flows from investing
     activities:
    Disposals - Cash disposed                -         -         -       (51)
    Interest received                      663     1,276     2,336     3,638
    Proceeds from disposals                  -         -     5,000         -
    Purchases of property, plant
     & equipment                          (118)        -      (155)     (368)
    Purchase of intangible
     exploration assets                 (7,169)   (1,200)  (26,173)   (6,263)

                                       --------------------------------------
    Net cash used in investing          (6,624)       76   (18,992)   (3,044)
                                       --------------------------------------

    Cash proceeds from financing
     activities:
    Proceeds on exercise of
     warrants/options                    1,054     6,164     1,588     8,538

                                       --------------------------------------
    Net cash from financing
     activities                          1,054     6,164     1,588     8,538
                                       --------------------------------------

    Cash and cash equivalents
    Net decrease in period             (11,058)     (680)  (31,742)   (8,000)
    Amount at start of period           56,622   102,430    77,306   109,750
                                       --------------------------------------
    Amount at end of period             45,564   101,750    45,564   101,750
                                       --------------------------------------
                                       --------------------------------------


    Serica Energy plc

    Notes to the Unaudited Consolidated Financial Statements

    1.  Corporate information

    The interim condensed consolidated financial statements of the Group for
    the nine months ended 30 September 2007 were authorised for issue in
    accordance with a resolution of the directors on 14 November 2007.

    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 TSX Venture Exchange. The principal activity of the Company is to
    identify, acquire and exploit oil and gas reserves.

    2.  Basis of preparation and accounting policies

    Basis of Preparation

    The interim condensed consolidated financial statements for the nine
    months ended 30 September 2007 have been prepared in accordance with
    IAS 34 Interim Financial Reporting.

    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.

    Significant accounting policies

    The accounting policies adopted in the preparation of the interim
    condensed consolidated financial statements are consistent with those
    followed in the preparation of the Group's annual financial statements
    for the year ended 31 December 2006, except for the adoption of the
    following new standards and interpretations, noted below,

           IFRIC 9 'Reassessment of Embedded Derivatives';

           IFRIC 10 'Interim Financial reporting and Impairment'.

    The adoption of these did not affect the Group's results of operations or
    financial position.

    The Group 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., Serica Nam Con Son B.V.
    and Serica Norge AS. Together, these comprise the "Group".

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

    3.  Segmental Information

    The primary segment reporting format is determined to be geographical
    segments and they are based on the location of the Group's assets. The
    Group has only one business segment, that of oil & gas exploration.

    The following tables present revenue and profit information regarding the
    Group's geographical segments for the nine months ended 30 September 2007
    and 2006.

    Nine months ended       Indonesia      UK & NW        Spain        Total
     30 September 2007                      Europe
                               US$000       US$000       US$000       US$000
    Revenue                         -            -            -            -
    Loss for the period          (953)        (808)        (184)      (1,945)


    Nine months ended       Indonesia      UK & NW        Spain        Total
     30 September 2006                      Europe
                               US$000       US$000       US$000       US$000
    Revenue                        61            -            -           61
    Income/(loss) for
     the period                 1,581       (2,374)        (126)        (919)


    4.  Equity Share Capital

                            30 Sept      30 Sept  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 (pnds stlg) 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
    pnds stlg 50,000 and US$20,000,000 divided into one 'A' share of
    pnds stlg 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:
                                                                       Total
                                             Share        Share        Share
                                           capital      premium      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

    Options exercised(2)      616,667           62          992        1,054
                         ----------------------------------------------------
    As at 30 June and
     30 Sep 2007          151,647,957       15,255      143,616      158,871


    (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.

    (2) From 1 April 2007 until 30 June 2007, 616,667 share options were
    converted to ordinary shares at prices ranging from Cdn$1.00 to Cdn$2.00.


    5.  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
    2,722,499 ordinary shares of the Company. No further options will be
    granted under the Serica BVI Option Plan.

    The Company has granted 5,322,000 options under the Serica 2005 Option
    Plan, 5,067,000 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. 110,000 of these
    were cancelled during Q2 2007. In August 2007, 1,200,000 options were
    awarded to non-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$485,000 has been charged to
    the income statement in the period ended 30 September 2007 and a similar
    amount credited to other reserves.

    The assumptions made for the options granted during 2005, 2006 and 2007
    include a weighted average risk-free interest rate of 6%, no dividend
    yield and a weighted average expected life of options of three years. The
    volatility factor of expected market price of 50% used for options
    granted during 2005 and 2006 was reduced to 40% for options granted in
    2007.

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

    Serica BVI Option Plan                                Number   WAEP Cdn$

    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

    Exercised during the period                         (616,667)       1.83
    Cancelled during the period                          (83,333)       1.36

                                                       ----------------------
    Outstanding at 30 June and 30 September 2007       2,722,499        1.57


    Serica 2005 Option Plan                                       (pnds stlg)

    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

    Granted during the period                            405,000        1.04
    Cancelled during the period                         (110,000)      (0.97)

                                                       ----------------------
    Outstanding at 30 June 2007                        3,867,000        1.01

    Granted during the period                          1,200,000        0.99

                                                       ----------------------
    Outstanding at 30 September 2007                   5,067,000        1.00


    6. Taxation

    The major components of income tax in the consolidated income statement
    are:

    Nine months ended 30 September:                         2007        2006
                                                          US$000      US$000
                                                       ----------------------

    Current income tax credit                              5,216           -
    Deferred income tax (charge)/credit                   (2,420)        506

                                                       ----------------------
    Total tax credit                                       2,796         506
                                                       ----------------------

    In 2006, the book gain on sale of the Lematang PSC is sheltered from tax
    by historic costs not reflected in the book value, indexation, and
    current UK tax losses elsewhere in the group. The 2006 deferred tax
    credit arises from the release of the deferred tax liability attached to
    the Lematang PSC.

    In 2007, expected tax recoveries from Norwegian expenditure to date have
    been recorded as a current income tax credit. These are partially offset
    by a deferred income tax charge from the timing differences arising from
    capitalised exploration expenditure.

    7.  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 and Q2 2006
    comparatives in this Q3 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


    INDEPENDENT REVIEW REPORT TO SERICA ENERGY PLC

    Introduction

    We have been instructed by the company to review the condensed set of
    financial statements in the report to shareholders for the nine months
    ended 30 September 2007 which comprises the Consolidated Income
    Statement, Consolidated Balance Sheet, Consolidated Statement of Changes
    in Equity, Consolidated Cash Flow Statement, and the related notes 1 to
    7. We have read the other information contained in the report to
    shareholders and considered whether it contains any apparent
    misstatements or material inconsistencies with the condensed set of
    financial statements.

    This report is made solely to the company in accordance with guidance
    contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial
    Information Performed by the Independent Auditor of the Entity" issued by
    the Auditing Practices Board. To the fullest extent permitted by the law,
    we do not accept or assume responsibility to anyone other than the
    company, for our work, for this report, or for the conclusions we have
    formed.

    Directors' responsibilities

    The report to shareholders is the responsibility of, and has been
    approved by, the directors.

    As disclosed in note 2, the annual financial statements of the Company
    are prepared in accordance with IFRSs as adopted by the European Union.
    The condensed set of financial statements included in this report to
    shareholders has been prepared in accordance with International
    Accounting Standards 34, "Interim Financial Reporting," as adopted by the
    European Union.

    Our responsibility

    Our responsibility is to express to the Company a conclusion on the
    condensed set of financial statements in the report to shareholders based
    on our review.

    Scope of Review

    We conducted our review in accordance with International Standard on
    Review Engagements (UK and Ireland) 2410, "Review of Interim Financial
    Information Performed by the Independent Auditor of the Entity" issued by
    the Auditing Practices Board for use in the United Kingdom. A review
    consists of making enquiries, primarily of persons responsible for
    financial and accounting matters, and applying analytical and other
    review procedures. A review is substantially less in scope than an audit
    conducted in accordance with International Standards on Auditing (UK and
    Ireland) and consequently does not enable us to obtain assurance that we
    would become aware of all significant matters that might be identified in
    an audit. Accordingly, we do not express an audit opinion.

    Review conclusion

    Based on our review, nothing has come to our attention that causes us to
    believe that the condensed set of financial statements in the report to
    shareholders for the nine months ended 30 September 2007 is not prepared,
    in all material respects, in accordance with International Accounting
    Standard 34 as adopted by the European Union.

    Ernst & Young LLP

    London

    14 November 2007

    
    %SEDAR: 00022686E




For further information:

For further information: Serica Energy plc: Paul Ellis, Chief Executive
Officer, paul.ellis@serica-energy.com, +44 (0)20 7487 7300; Chris Hearne,
Finance Director, chris.hearne@serica-energy.com, +44 (0)20 7487 7300;
JPMorgan Cazenove: Steve Baldwin, steve.baldwin@jpmorgancazenove.com, +44
(0)20 7588 2828; Tristone Capital Limited: Majid Shafiq,
mshafiq@tristonecapital.com, +44 (0)20 7355 5872; 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: Kelly Cody, kelly@chfir.com, (416) 868-1079

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