AGM Statement

RNS Number : 4455J

Serica Energy plc

30 June 2011

 



Serica Energy plc

("Serica" or the "Company")

Annual General Meeting Statement

Status of Review of Indonesian Assets

Submission of Columbus Field Development Plan

London, 30 June 2011 - Serica Energy plc (AIM & TSX: SQZ) reports that the following announcements will be included in the statement to be made by Tony Craven Walker, Chairman, at today's AGM which is due to commence at 10am:

Status of Review of Indonesia Assets

"Last November we announced a review of our holdings in Indonesia.  The outcome of this review was flagged to shareholders at the time of the release of our full year results.  After evaluating proposals from a number of companies we have decided to accept an offer from Pace Petroleum, a company backed by GEMS, under which Pace will be acquiring Serica's subsidiary group of companies through which we hold our Indonesian business.  The funding for this transaction is to be provided by a new resources fund being finalised by GEMS which is an Asian Private Equity Group based in Hong Kong. We have received written confirmation from GEMS that they expect completion of a fundraising in July and the transaction to complete expeditiously thereafter.  It is, of course, a possibility that GEMS will not achieve this, in which case we shall be continuing discussions with other parties who have made proposals but we will also be looking at the possibility of retaining our Kambuna production which has been performing well and benefitting from recent high oil prices.

The sale by Serica and the purchase by Pace, described in a fully termed and initialled SPA but subject to final approvals by both GEMS and Serica's Board, comprises the companies which hold our 25% interest in the Kambuna field, our 30% interest in the Kutai exploration block offshore East Kalimantan and our 100% interest in the East Seruway block offshore North Sumatra.  The cash consideration, as at 1st January this year, is $US33 million adjusted for working capital plus a deferred payment of $US2 million, contingent on the outcome of the Kambuna #5 well planned for drilling later this year.  The sale excludes the value of certain oilfield equipment, which will be retained by Serica, and the value of VAT tax receipts in respect of past costs which will pass through to Serica as they are received."

Submission of Columbus Field Development Plan (FDP)

"The Columbus field, a field that we discovered and operate, is a core asset ready for development.  All basic engineering design for this gas field has been completed and the Field Development Plan has been submitted to the Department of Energy and Climate Change for their approval on behalf of our partners.  Netherland Sewell & Associates estimate that the field contains some 79.5 bcf of gas and 4.9 mmbbls of condensate 2P reserves, together amounting to some 18.2 mmbbls of oil equivalent.  Bringing this valuable resource to development will be a major step for Serica.  There are still some hurdles to overcome but we are now on the way to commencing development aimed at a 2014 start up date.  In valuing the asset we incorporate the value of our carried forward tax position where this can be used to provide relief from taxes that would otherwise be payable by Columbus and this, I believe, is the method used by external analysts."

30 June 2011

Enquiries:

Serica Energy plc
Tony Craven Walker, Chairman	[e-mail]	[phone]
Chris Hearne, CFO	[e-mail]	[phone]
J.P.Morgan Cazenove
Patrick Magee	[e-mail]	[phone]
RBC Capital Markets
Josh Critchley	[e-mail]	[phone]
Matthew Coakes	[e-mail]	[phone]
College Hill
Nick Elwes	[e-mail]	[phone]
Simon Whitehead	[e-mail]	[phone]

To receive Company news releases via email, please contact [e-mail] and specify "Serica press releases" in the subject line.

The technical information contained in the announcement has been reviewed and approved by Peter Sadler, Chief Operating Officer of Serica Energy plc. Peter Sadler is a qualified Petroleum Engineer (MSc Imperial College, London, 1982) and has been a member of the Society of Petroleum Engineers since 1981.

Notes to Editors

Serica Energy plc is an oil and gas exploration and production company based in London, England, and holds exploration and production licences offshore UK, Spain, Indonesia and in the Atlantic Margin basins of Ireland and Morocco. The Company's key producing and development assets are a 25% interest in the producing Kambuna field offshore Indonesia and a 50% stake in the UK Central North Sea Columbus field. Serica's gross oil and gas production amounts to approximately 2,800 barrels of oil equivalent per day.

The Company is listed on the London AIM market and the Toronto TSX market under the symbol "SQZ".

www.serica-energy.com

Forward Looking Statements

This disclosure contains certain forward looking statements that involve substantial known and unknown risks and uncertainties, some of which are beyond Serica Energy plc's control, including: the impact of general economic conditions where Serica Energy plc operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Serica Energy plc's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Serica Energy plc will derive therefrom.

 

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