Serica Energy plc Erskine Field Update (8533L)
24 April 2018 - 4:00PM
UK Regulatory
TIDMSQZ
RNS Number : 8533L
Serica Energy plc
24 April 2018
Serica Energy plc ("Serica" or the "Company")
Erskine Field Update
London, 24 April 2018 - Serica Energy plc (AIM: SQZ), an
independent oil and gas company with production, development and
exploration licence interests in the UK North Sea and exploration
interests in Ireland and Namibia, hereby provides the following
update on the interruption to production at the Erskine field.
As announced on 22 January 2018, during cleaning operations a
blockage occurred on the Lomond to Everest pipeline, through which
Erskine condensate is exported to market. This caused Erskine field
production to be shut-in. The blockage is believed to be due to a
deposit of wax in the pipeline. Chrysaor Limited, the Operator of
this pipeline, has been attempting to resolve this problem but has
been unable to achieve a significant breakthrough. Therefore, the
decision has been made to cease clearance operations and instead
concentrate on accelerating the pipeline bypass programme and on
running an extended maintenance programme.
Plans to lay a new 26km length of pipeline to bypass the zone
affected by wax deposits have been progressing. An order was placed
with the pipeline manufacturers in February and a route survey has
been completed. Approvals for the work from the authorities are
expected in July and construction is scheduled for August, with
production restart expected in September. Once laid, a proactive
cleaning programme will commence in order to maintain the pipeline
through high frequency pigging.
As a significant maintenance programme was already planned for
this summer, the Lomond operator has taken this opportunity to
extend this, performing further, pre-emptive maintenance on the
platform whilst it is hydrocarbon free. From 1 May, work will
commence to reduce the backlog of maintenance work as well as
perform inspections and replace and repair key equipment. This work
is designed to improve future performance of the facilities,
reducing production interruptions and reducing the length of future
shut-downs in the coming years.
Mitch Flegg, Chief Executive of Serica Energy, commented:
"While we are disappointed that efforts by the Lomond field
operator to clear wax from the Lomond condensate export line have
not been successful we are pleased that plans to achieve a
permanent solution for this recurring problem are progressing
well.
The operator is taking the opportunity to perform significant
extra maintenance work during the planned 2018 Lomond shutdown.
This should lead to improved performance later this year and in
future years to the long-term benefit of the Erskine field.
Although this is expected to extend the Erskine shut in to
September, there was no certainty that the clearance work would
have been successful but would have still incurred additional
ongoing cost. We have the benefit of a strong balance sheet which
enables us to fund our share of the pipeline bypass during this
period without Erskine production revenues.
One of the key reasons for Serica's acquisition of BP's
interests in the producing Bruce, Keith and Rhum ("BKR") fields is
to diversify Serica's production. The BKR transaction is effective
from 1 January 2018 with Serica deriving full benefit from that
date. BKR production is unaffected by the Lomond to Everest
pipeline problems. The transaction is due to complete late in Q3
this year."
Technical Information
The technical information contained in the announcement has been
reviewed and approved by Clara Altobell, VP Technical at Serica
Energy plc. Clara Altobell (MSc in Petroleum Engineering from
Imperial College, London) has over 20 years of experience in oil
& gas exploration, production and development and is a member
of the Society of Petroleum Engineers (SPE) and the Petroleum
Exploration Society of Great Britain (PESGB).
Regulatory
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
Enquiries:
Serica Energy plc
Tony Craven Walker
Executive Chairman tony.cravenwalker@serica-energy.com +44 (0)20 7457 2020
Mitch Flegg
CEO mitch.flegg@serica-energy.com +44 (0)20 7457 2020
Peel Hunt
Richard Crichton richard.crichton@peelhunt.com +44 (0)20 7418 8900
Ross Allister ross.allister@peelhunt.com +44 (0)20 7418 8900
James Bavister james.bavister@peelhunt.com +44 (0)20 7418 8900
Instinctif
David Simonson david.simonson@instinctif.com +44 (0)20 7457 2020
Laura Syrett laura.syrett@instinctif.com +44 (0)20 7457 2020
George Yeomans george.yeomans@instinctif.com +44 (0)20 7457 2020
NOTES TO EDITORS
Serica Energy is an oil and gas exploration and production
company with exploration, development and production assets in the
UK and exploration interests in the Atlantic margins offshore
Ireland, and Namibia. Serica holds an 18% non-operated interest in
the Erskine field in the UK Central North Sea.
In November 2017 Serica announced the proposed acquisition of
BP's interests in the Bruce, Keith and Rhum fields in the North Sea
and associated infrastructure. Under the terms of proposed
acquisition Serica will acquire a 36% interest in Bruce, a 34.83%
interest in Keith and a 50% interest in Rhum (collectively the "BKR
Assets"). The deal has an effective date of 1 January 2018 and
completion of acquisition is expected to take place in the third
quarter of 2018.
Further information on the Company and the proposed acquisition
of the BKR Assets can be found at www.serica-energy.com.
The Company is listed on the AIM market of the London Stock
Exchange under the ticker SQZ and is a designated foreign issuer on
the TSX. To receive Company news releases via email, please contact
serica@instinctif.com and specify "Serica press releases" in the
subject line.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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