Serica Energy Share News (SQZ)

(Sharecast News) - UK North Sea-focussed upstream oil and gas company Serica Energy updated the market on operations at the Rhum R3 well on Thursday, reporting that new completion equipment had been successfully installed, and a flow test performed.
The AIM-traded firm said a stabilised flow rate of 58.4 million standard cubic feet of gas and 135 barrels of condensate per day was achieved through a 60/64 inch choke.

That rate was constrained by the surface well test equipment on board the WilPhoenix semi-submersible drilling rig, with the company expecting the well to produce at higher rates when in production.

A diving support vessel had been contracted to install the subsea control equipment required for the well to start producing in the third quarter.

The company said the successful re-completion of R3 would increase Rhum's production capacity using the existing facilities located on the Bruce platform, and would thus not lead to "significant" additional carbon dioxide emissions.

That was in line with Serica's stated objective of reducing the carbon intensity of its production operations.

"Operations on R3 have proved more challenging than expected but the skill and dedication of our operational team has enabled us to achieve this welcome result," said chief executive officer Mitch Flegg.

"The volumes flowing during the test are equivalent to over 10,000 boe/d which demonstrates the quality of the Rhum asset."

Flegg said it was always expected for the flow test results to be constrained by the surface test equipment, but initial analysis of the data recovered indicated that the flow potential of the well was at the upper end of the company's range of expectations.

"The third Rhum well will enable enhanced production rates from the field and will provide redundancy to support production from the other two Rhum wells."

At 1043 BST, shares in Serica Energy were up 6/53% at 125.7p.