Serica Energy plc (AIM: SQZ) is pleased to announce the entry into a sale and purchase agreement, via two of its newly acquired subsidiaries following the completion of the Prax Upstream transaction, to acquire a portfolio of Southern North Sea assets(1) (the ‘Acquired Assets’) from Spirit Energy Limited (Spirit Energy), and certain affiliates (‘the Transaction’). The upfront consideration is £57 million (c.$74 million) with the effective economic date being 1 January 2025. Completion is expected in H2 2026.

The Acquired Assets comprise a 15% non-operated working interest in the Cygnus field, one of the largest producing gas fields on the UK Continental Shelf; a 25% non-operated working interest in Clipper South; operated positions across various assets in the Greater Markham Area (‘GMA’); and further operated and non-operated interests in gas fields across the Southern North Sea, being Eris (54% operated working interest), Ceres (90% operated working interest), and Galleon (8.4% non-operated working interest). Following completion, the seller will retain decommissioning liabilities on the operated assets, expected to constitute over 75% of the total estimated decommissioning liability.

Chris Cox, Serica's CEO, stated:

“This transaction is a further step towards delivering on our strategy and diversifying our asset base through the addition of high-quality assets, adding over 15% to our reserves and significantly boosting production. These are also assets I personally know well, and the Cygnus field in particular is an attractive addition to our portfolio given its high uptime, low emissions, and low operating costs. There is also the potential for further infill drilling opportunities across the portfolio, most significantly at Cygnus, where drilling is ongoing.

The transaction will require only modest cash outflow on completion and is set to generate material cash flows, while also limiting our exposure to future decommissioning costs, enhancing Serica’s ability to create further value for shareholders through investing in growth and delivering attractive cash returns.”

(1) The Transaction is being effected through a combination of asset transactions as well as the acquisition of Spirit Energy’s two Dutch holding companies, Spirit Energy Nederland B.V. and Spirit Energy Infrastructure B.V.

About Serica Energy

Serica Energy is a British independent oil and gas exploration and production company with a portfolio of UKCS assets. Serica has a balance of gas and oil production. The Company is responsible for about 5% of the natural gas produced in the UK, a key element in the UK's energy transition.

Serica's producing assets are focused around two main hubs: the Bruce, Keith and Rhum fields in the UK Northern North Sea, which it operates, and a mix of operated and non-operated fields tied back to the Triton FPSO. Serica also has operated interests in the producing Columbus (UK Central North Sea) and Orlando (UK Northern North Sea) fields and a non-operated interest in the producing Erskine field in the UK Central North Sea.

Serica has a two-pronged strategy for growth comprising investment in its existing portfolio and M&A.

About Spirit Energy

We are a pioneering energy company with two shareholders: Centrica plc (69%), and Stadtwerke München GmbH SWM (31%). We operate in the UK and the Netherlands, with a 600-strong team, and 18 producing field interests.

Our portfolio and ambitions span the breadth of the energy transition. We’re continuing to break new ground, collaborating, and thinking differently. Our strategy is focused on safely delivering production from our existing assets; meeting and de-risking our decommissioning obligations and pursuing strategic energy transition opportunities from our existing assets.

We’re proud of our heritage. With more than 40 years of production, we’re maximising the potential of our existing assets and substantial gas reserves in the UK and Netherlands. Above all, we live by our commitment to safety in everything we do. Our portfolio is predominantly gas (96%), providing vital, primary energy to fuel our homes and businesses in the UK and Europe.