Transforming Serica: The Erskine Deal Strategic and operational update 16 July 2015 London
SERICA: COVERING THE FULL CYCLE Production: Erskine Field 3.3mmboe booked at 30 June 2015 Can deliver up to *4,300boed net to Serica Average rate since production restart 2000boepd net Development: Columbus Plans are progressing…
SERICA: NEAR TERM OBJECTIVES Erskine Benefit from expected improvements on Lomond following major investment Improve performance by identifying and solving downstream bottlenecks Deliver solutions to cut costs and extend field…
SERICA ASSET BASE: PRODUCTION, DEVELOPMENT, EXPLORATION UK/NORWAY ATLANTIC MARGIN Production, development and High impact exploration exploration assets portfolio focussed on underexplored Atlantic Margin UK Central North Sea…
ERSKINE: TRANSACTION Consideration: US11.1million cash plus 13.5 million Serica shares effective 1 January 2014 Cash consideration payable in four equal instalments: June 2015, 2016, 2017 and 2018 Final payment adjusted for:…
ERSKINE: TRANSFORMATIONAL Material benefits to Serica: 3.6 million barrels of oil equivalent acquired at 1 January 2014 at 4 per boe Ongoing cash flow on a tax efficient basis BP retain Sericas share of decommissioning liability…
ERSKINE: OFFTAKE ROUTE & INFRASTRUCTURE Erskine Platform Unmanned wellhead platform with 5 production wells Access to wells for wireline intervention Multiphase pipeline from Erskine to Lomond Lomond Processing Condensate and Gas…
ERSKINE: SUB SURFACE RESERVOIR MODEL Five wells drain the four reservoir regions Field has produced for 16 years Produced Reserves: 120mmboe (gross)* Remaining Reserves acquired (gross): 20mmboe** Remaining reserves at 30 June…
ERSKINE: WELL POTENTIAL WELL PERFORMANCE Net boepd Serica share 3 of 5 wells producing in 6,000 W2 May/June 15 W1 5,000 W5 4 out of 5 wells now on production 4,000 W4 and have exceeded estimated W3 potential (achieved 4,000…
ERSKINE: BOEPD HISTORY NET TO SERICA Lomond restricted Erskine in 2014 Lomond shutdown for investment 5000 4500 Transaction 4000 Completed. Erskine restart 3500 3000 2500 2000 1500 1000 500 0 11
ERSKINE: FIELD PERFORMANCE SINCE RESTART IMPROVED FACILITY Serica Net Erskine Production boe/d since restart PERFORMANCE 5000 4500 Erskine restarted end May 2015 4000 Daily Production boe/d 3500 2014/15 investment has 3000…
CENTRAL NORTH SEA DEVELOPMENT: COLUMBUS FIELD Located in the UK Central North Sea, 8km from Lomond platform Serica holds 50% of block 23/16f and operates the field 13
COLUMBUS FIELD: FULLY APPRAISED 5.2mmboe contingent resources net to Serica Field has been delineated with four exploration/appraisal wells Individual development wells estimated to flow at up to 40mmscfd gas and 1,500bbls/d…
COLUMBUS AND ERSKINE SYNERGIES COLUMBUS PRODUCTION THROUGH LOMOND Extends Lomond platform life and availability for Erskine, defers abandonment Reduces cost per boe for Erskine and Lomond Encourages innovation and new ways of…
COLUMBUS DEVELOPMENT OPTIONS LOMOND PREFERRED OPTION Produce Columbus with a single well initially with scope for a second well, depending on production data Production combines with Erskine production at base of Lomond platform…
COLUMBUS DEVELOPMENT OPTIONS LOMOND PLATFORM MODIFICATIONS Columbus and Erskine fluids could share processing facilities on Lomond Very little modification required at Lomond Targeting sub 10/boe total development costs Targeting 15…
COLUMBUS ROADMAP MILESTONES TO SANCTION TARGET LOMOND OPTION DATE P50 case economic NOW Lomond platform to demonstrate: Lomond Significant improvement in uptime Platform 2H 2015 Acceptable operating costs Submit revised FDP…
FULLY CARRIED HIGH IMPACT EXPLORATION: 22/19c BLOCK 22/19c Located in proven play area Analogous discoveries in the area Close to Columbus field and infrastructure in which Serica has an interest Prospects Three high impact…
22/19c PROSPECTS MAIN PROSPECT subsea Metres Rowallan West Rowallan East Two reservoir targets Triassic and Middle Eocene Jurassic 3000 Structural prospect on 3D seismic Palaeocene Analogue to Culzean discovery in Block…
FINANCIAL HIGHLIGHTS: WELL BALANCED End year cash balances 9.9 million, increasing to over 14 million upon Erskine completion in June with no borrowings UK tax losses of 186 million available for offset against taxable income from…
ENTERPRISE VALUE: PEER COMPARISON SERICA HAS THE LOWEST EV/boepd IN PEER GROUP Reserves and production based on Woodmac estimates 22
CONCLUSIONS THE ERSKINE TRANSACTION TRANSFORMS SERICAS ABILITY TO GROW Serica now has a significant production stream With zero debt, a strong tax position and limited commitments Holds a strategic position in Erskine/Columbus/Lomond…
ADDITIONAL SLIDES 24
GROUP INCOME STATEMENT DECEMBER 2014 Group Income Statement for the year ended 31 December 2014 2014 2013 2014 loss includes US000 US000 Columbus impairment and Morocco drilling Continuing operations Pre-licence costs (512) (330)…
GROUP BALANCE SHEET 31 DECEMBER 2014 Group Balance Sheet as at 31 December 2014 2014 2013 Excludes Erskine Non-current assets US000 US000 acquisition (completed Exploration & evaluation assets Other receivables 57,843 247 74,609…
EXPLORATION PORTFOLIO: NW EUROPE UK Southern North Sea Greater York Area Ranking prospects to identify drilling target. Close to infrastructure (York) East Irish Sea Doyle Prospect, Carry on well (up to 11million gross cap). Well…
EXPLORATION PORTFOLIO: AFRICA MOROCCO Tarfaya-Ifni Basin, Sidi Moussa SM-1 well encountered oil. Evaluating drilling and fluid analysis results Further work under review including possible drilling Requesting licence extension…
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