Serica further boosts Rhum, Keith interests
UK-listed company Serica Energy has signed an agreement to further increase interests in the Bruce and Keith fields in the UK North Sea.
The company on Tuesday said it would acquire the 3.75% interest in the Bruce field and the 8.33% interest in the Keith field and associated infrastructure owned by Marubeni. The net 2P Reserves attributable to the Marubeni Assets as at 1 August 2018 are estimated to amount to approximately 0.95mmboe.
The announcement comes just a day after Serica announced the signature of sale and purchase agreement with BHP Billiton to acquire further interests in the Bruce and Keith fields.
As for the Marubeni transaction, Serica said it is different from the other deals that Serica has entered into with BP, Total E&P and BHP, in that Serica will acquire the decommissioning obligations of Marubeni, but will receive in turn a cash consideration from Marubeni, and there will be no deferred or contingent consideration. This reflects in part the small interest in Bruce being acquired.
The transaction together with the previously announced purchases from BP, Total E&P and BHP will result in Serica consolidating its ownership of the Bruce and Keith fields to 98% and 100% respectively post-completion.
Serica said that the transaction would consolidate its position as “one of the leading mid-tier independent oil and gas producers” on the UK Continental Shelf and will provide incremental benefits to the company.
Mitch Flegg, Chief Executive of Serica Energy, commented: “We are targeting completion of the transactions with BP, Total E&P, BHP, and Marubeni on 30 November 2018 and our ownership in Bruce will then increase to 98% and in Keith to 100%. On that date over 110 staff will transfer from BP to Serica to join the team that we have recruited in our new operational headquarters in Aberdeen.”
“It is our intention to build on the excellent work that has been performed by BP and its partners in Bruce, Keith, and Rhum. With our consolidated ownership of the three fields, and as operator, we will be in a strong position to deliver enhanced returns from these assets and extend their operating lives for the benefit of our shareholders and fellow stakeholders in the North Sea and Aberdeen.”
The Bruce field was discovered in June 1974 and is located in the UK Northern North Sea, 350 km northeast of Aberdeen at a water depth of 122 meters and with an area of approximately 75 km². Field development was approved in 1990 and production started in 1993. Production is primarily gas with associated condensate and NGLs. The field produces from 11 reservoir units, separated by faulting and has had a cumulative production since 1993 of over 3tcf. To date there are over 60 well penetrations in the field with 21 producing wells.
The Keith field lies 6.8 km to the southwest of the Bruce field in a water depth of 120 meters and has been developed as a subsea tie-back to the Bruce complex. The Keith field was confirmed as a separate field to Bruce after drilling in 1987 and first came on production in 2000, with a second phase of development in 2002. No further capital programmes are planned on Keith as the field is in the final stages of its producing life.
Subject to completion of the Total E&P Transaction, Serica UK intends to continue production from its single well as long as economically viable, but the well is currently scheduled to cease production in 2019. Wet gas from the Bruce and Keith fields is processed at the Bruce complex and then transported via a 6 km spur line through the Frigg pipeline to St. Fergus for Natural Gas Liquids extraction. Dry gas is delivered as part of a commingled gas stream at St. Fergus into the National Transmission System. NGLs are extracted at St. Fergus and transported via a 12-inch diameter, 22 km pipeline to Cruden Bay.