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Investing.com -- Serica Energy plc (LON:SQZ) has signed an agreement to acquire BP’s entire stake in the P111 and P2544 licences in the UK Central North Sea, the company announced Monday.
The acquisition includes a 32% non-operated working interest in the P111 licence, which contains the Culzean gas condensate field, and the P2544 exploration licence adjacent to it. Culzean, operated by TotalEnergies, is currently the largest single producing gas field in the UK North Sea.
The deal is subject to a 30-day pre-emption period during which the other Culzean field partners - TotalEnergies (49.99%) and NEO NEXT (18.01%) - have the option to acquire BP’s stake under the same terms agreed by Serica.
The acquisition has an economic date of September 1, 2025, with an upfront cash consideration of $232 million, subject to customary working capital adjustments. This amount will be partially offset by a payment reflecting interim post-tax cashflows between the economic date and the completion date, expected around the end of 2025.
The agreement also includes provisions for two additional cash payments contingent on successful results and production from an exploration opportunity on the P2544 licence, and changes to the UK ring-fence fiscal regime.
Serica plans to fund the consideration through a combination of interim cashflows from the Culzean interest and existing financial resources, including cash and undrawn amounts under its existing $525 million Reserve Based Lending facility. The company is also considering a new acquisition facility, which would later be refinanced via increased debt facilities.
Chris Cox, Serica’s CEO, said: "Should this transaction complete, it would deliver a step-change for Serica, adding material production and cash flows from the largest producing gas field in the UK. Culzean is a world-class asset, delivering gas from a modern platform with exceptionally high uptime and low emissions."
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