UK oil & gas consolidation continues: Serica makes move on Spirit Energy’s North Sea assets

December 16, 2025, by Melisa Cavcic

UK-based upstream oil and gas player Serica Energy has taken another consolidation step on the UK Continental Shelf (UKCS) by striking a deal to acquire the oil and gas portfolio of Spirit Energy and its affiliates for an upfront consideration of £57 million (around $74 million).

Cygnus Alpha; Source: Neptune Energy, which became part of Eni's UK portfolio now managed by Ithaca

While disclosing the entry into a sale and purchase agreement (SPA) via two of its newly acquired subsidiaries, following the completion of the Prax Upstream transaction, to buy a portfolio of Southern North Sea assets from Spirit Energy and certain affiliates, Serica emphasizes that the effective economic date is January 1, 2025, with the completion expected in H2 2026.

The assets comprise a 15% non-operated working interest in the Cygnus field, considered to be one of the largest producing gas fields on the UK Continental Shelf; a 25% non-operated working interest in Clipper South; 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, being Eris (54% operated working interest), Ceres (90% operated working interest), and Galleon (8.4% non-operated working interest).

Upon completion, Spirit Energy will retain decommissioning liabilities on the operated assets, expected to constitute over 75% of the total estimated decommissioning liability. The decommissioning spend for non-operated assets is expected to be $60-70 million on a pre-tax undiscounted basis, with the majority of the spend not due before the early to mid-2030s.

Chris Cox, Serica’s CEO, highlighted: “This transaction is a further step towards delivering on our strategy and diversifying our asset base through the addition of high-quality assets, adding over 15% to our reserves and significantly boosting production. These are also assets I personally know well, and the Cygnus field in particular is an attractive addition to our portfolio given its high uptime, low emissions, and low operating costs.

“There is also the potential for further infill drilling opportunities across the portfolio, most significantly at Cygnus, where drilling is ongoing. The transaction will require only modest cash outflow on completion and is set to generate material cash flows, while also limiting our exposure to future decommissioning costs, enhancing Serica’s ability to create further value for shareholders through investing in growth and delivering attractive cash returns.”

The acquisition is expected to be immediately cash generative, with about $100 million of free cash flow to be generated by these assets by the end of 2028, supporting and enhancing Serica’s strategy of investing for growth and delivering attractive shareholder returns.

This transaction adds 18.7 mmboe of 2P reserves as at January 1, 2025 to the firm’s portfolio, increasing its 2P reserves by 16%, at a cost of approximately $3.9/boe of 2P reserves. It also enables the addition of pro-forma production of around 13,500 boepd in H1 2025, of which 96% was gas.

The portfolio enrichment establishes an operated production hub in the Southern North Sea in which to deploy the UK player’s subsurface and mature asset operatorship expertise, while also further diversifying its UKCS presence and hydrocarbon evacuation routes.

The decommissioning of the operated assets, although funded by Spirit Energy, will be undertaken by Serica, permitting the company to strengthen its operational capacity in this activity.