UK-based upstream oil and gas player Serica Energy has expanded its offshore portfolio on the UK Continental Shelf (UKCS) with the wrap-up of a multimillion-dollar oil and gas asset acquisition from Spirit Energy and its affiliates.
With the acquisition of the Southern North Sea asset portfolio now out of the way, Serica Energy explains that it has strengthened its production base and reserves, following a net payment of £33 million ($43 million), which was paid to Spirit Energy, consisting of the upfront consideration of £57 million ($75 million), reduced by the interim post-tax cashflows calculated in accordance with the terms of the agreement between the effective economic date of January 1, 2025, and the October 1, 2026, completion date.
Chris Cox, Serica’s CEO, commented: “We are delighted to complete this acquisition of high-quality assets which materially boost our production and reserves while increasing our commodity weighting towards gas. This is an excellent transaction for Serica: it is immediately cash generative, strengthens our position in the UK gas market and adds a significant new Southern North Sea hub to our portfolio.”
The company emphasizes that this acquisition delivers an immediate and meaningful contribution to its production through the addition of around 10,000 barrels of oil equivalent per day (boepd) and near-term cash generation. According to the company, free cash flow from these acquired assets is forecast to exceed $200 million by the end of 2028.
This is more than double the expectation at the time of the original announcement in December 2025, primarily due to a stronger gas price outlook, a robust production outlook, and rephasing of some interim period production and cash flows into the post-completion period. The new additions comprise a material Southern North Sea gas portfolio totalling 18.7 million boe of 2P reserves and 2C resources of 3.4 million boe as of the transaction's effective economic date.
This transaction adds a 15% non-operated working interest in the Cygnus gas field, a 25% non-operated working interest in the Clipper South gas field, 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.
Spirit Energy is retaining decommissioning liabilities on the operated assets, expected to constitute over 75% of the total estimated decommissioning liability, which Serica sees as something that further supports the attractive risk-adjusted economics of the transaction.
Cox added: “With forecast free cash flow from the acquired assets expected to exceed $200 million by the end of 2028, the value case has strengthened materially since announcement.
“We are excited to welcome our new colleagues in Hoofddorp in the Netherlands and Aberdeen to Serica and to move quickly into integration, as we continue to build a stronger, resilient, and cash-generative North Sea business.”