Serica Energy Shares Rise on Deal to Buy BHP Billiton Assets in North Sea
05 November 2018 - 7:47PM
Dow Jones News
By Oliver Griffin
Shares in Serica Energy PLC (SQZ.LN) rose on Monday after it
said it has signed a sale and purchase agreement with BHP Billiton
PLC (BLT.LN) to increase its interests in the North Sea.
The oil-and-gas company said it will acquire a 16% interest in
the Bruce field and a 32% interest in the Keith field from BHP
subsidiary BHP Billiton Petroleum Great Britain Ltd. for an initial
cash consideration of 1 million pounds ($1.3 million), adjusted for
working capital and 40% of post-tax cashflows from Jan. 1.
Serica Energy said that following the deal, it will hold
interests of 94% and 92% in the Bruce and Keith fields,
respectively, following its previously announced purchases from BP
PLC (BP.LN) and Total SA (FP.FR).
Serica said proven and probable reserves--also known as 2P
reserves--at the fields are expected to increase by around 4
million barrels of oil equivalent to approximately 62.7 million
barrels when the transaction is completed.
The company said conditions of the license for the Rhum field,
issued by the U.S. Department of the Treasury's Office of Foreign
Asset Control to Serica and BP, have been met in full.
Serica acquired a 50% stake in the Rhum field last November as
part of its deal with BP. However, the co-owner of the Rhum field
is Iranian Oil Company (U.K.) Ltd, a subsidiary of the Iranian
state oil company, which could have opened up the possibility of
companies working on the field being hit by U.S. sanctions.
The company said all benefits accruing from and relating to
Iranian Oil Company's interest in the Rhum field will be held in
escrow as long as U.S. sanctions apply. These arrangements enable
third-party service providers to continue to provide services
unhindered and production from the Rhum field to continue
uninterrupted, Serica said.
Shares at 0808 GMT were up 9.2% at 130 pence.
Write to Oliver Griffin at oliver.griffin@dowjones.com;
@OliGGriffin
(END) Dow Jones Newswires
November 05, 2018 03:32 ET (08:32 GMT)
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