Serica signs deal for BP’s stake in North Sea Erskine

Offshore staff

LONDON – Serica Energy (AIM: SQZ) has acquired an 18% interest in the producing Erskine gas/condensate field in the UK central North Sea from BP.

The field straddles blocks 23/26a (Area B) and 23/26b (Area B).

Under the terms of the transaction 13.5 million shares in Serica have been issued to BP which now holds around 5% of Serica’s enlarged issued share capital.

Chevron operates the field with a 50% interest, the other partner being BG. The well stream is transported from the normally unmanned Erskine wellhead platform to the BG-operated Lomond platform for processing.

Gas then heads through the CATS pipeline system to the terminal at Teeside, northeast England, while separated condensate is delivered via the Forties pipeline to Cruden Bay.

Last September Erskine was shut down due to the need for extensive maintenance and enhancements at the Lomond field. However, production re-started late last month and is expected to build. The partners plan to seek further ways of improving performance.

Serica’s estimate of its share of the eventual decommissioning costs for Erskine - up to £174 million ($265 million) gross - will be covered by BP, with Serica responsible for any costs above this level.

Aside from a share of production, the deal provides potential synergies to Serica for its planned Columbus gas field development in the area.

06/08/2015

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