The UK-based subsidiary of Serica Energy has signed an agreement to purchase BHP Billiton Petroleum Great Britain’s stake in the Bruce and Keith fields, along with associated infrastructure, in the UK North Sea.
The acquisition comprises a 16% interest in the Bruce field and a 31.83% interest in the Keith field (BHP Assets). It will also respectively increase Serica UK’s stake in these fields to 94% and 92%.
It comes after the company signed an agreement last November to acquire a 36% interest in Bruce, a 34.83% interest in Keith and a 50% interest in Rhum field, along with related infrastructure, from BP.
In August, Serica UK agreed to buy a 42.25% interest in the Bruce field and a 25% interest in the Keith field from Total E&P UK.
Under the terms of the agreement with BHP, Serica UK will make an initial payment of £1m. BHP will also be entitled to receive a share of pre-tax net cash flow from the BHP Assets under a net cash flow sharing agreement.
The net cash flow share structure comprises 60% for the rest of this year, 50% next year and 40% for the next two years.
Serica Energy chief executive Mitch Flegg said: “This acquisition, in addition to the previously announced transactions with BP and Total, place us in an even better position to unlock increased value from the assets and benefit from economies of scale.
“Completion of the transaction with BHP is anticipated to take place immediately after the respective completions of the BP and Total E&P transactions. This will represent a major transformation for Serica in becoming one of the leading UK independent offshore operators and producers in the North Sea.”
Subject to completion of the BP transaction and receipt of regulatory approvals, the closure of the acquisition is anticipated to take place by the end of this month.
These three transactions will take Serica’s pro-forma net 2P reserves as at 1 August 2018 to around 62.7mmboe, with the BHP transaction adding 4mmboe.