Serica one step away from closing Tailwind acquisition

UK-based oil and gas company Serica Energy has completed all the steps required to close the acquisition of Tailwind Energy Investments from a compatriot company, Tailwind Energy Holdings, aside from one, which also needs to be checked off the list.

Back in December 2022, Serica Energy revealed an agreement with Tailwind Energy Holdings to acquire the entire issued share capital of Tailwind Energy Investments in a deal worth approximately £367 million. The following month, the firm outlined the strategic rationale behind its proposed acquisition of Tailwind Energy Investments, explaining that it would enable it to diversify its portfolio, boosting it with a new production hub.

Following subsequent shareholder approval on 27 January 2023, Serica Energy disclosed on Tuesday, 21 March 2023, that the conditions precedent pursuant to the sale and purchase agreement for the acquisition of Tailwind Energy Investments were satisfied, save for the condition precedent relating to the admission of the completion consideration shares. The completion of this acquisition will occur immediately following the admission of the completion consideration shares.

Serica confirms that up to 111,048,124 new ordinary shares in the company, which will represent up to 28.9 per cent of the firm’s enlarged issued share capital, will be allotted and issued. An application has been made to the London Stock Exchange for 108,170,426 consideration shares to be admitted to trading on AIM and the admission is expected to take place at 8.00 a.m. on or around 27 March 2023.

Furthermore, the acquisition of Tailwind is expected to significantly increase reserves and production along with cash flow and earnings per share, lifting Serica into the top ten UK producers with net production expected to increase by 50-80 per cent in 2023, which would remain sustained until 2025 at above 40,000 boe/d.

In addition, Serica believes that the acquisition creates a diverse and resilient production portfolio with multiple organic investment opportunities – such as the Bruce hub and Triton area infill wells – with a combination of teams with “impressive track records” of deals – BKR and Triton – and projects like R3 and Evelyn.

Regarding the recent developments in the Triton area, it is worth noting that Tailwind started production from a well in the UK Central North Sea in February 2023. This has been tied back to the Triton FPSO.