(Alliance News) - Serica Energy PLC said on Wednesday it is "delighted" to have been awarded a new licence in the UK North Sea.
The award, outside of the usual licensing round, covers licence P2501, which includes the North Eigg and South Eigg prospects.
North Eigg is estimated to contain 360 billion cubic feet, and potentially over one trillion cubic feet, of recoverable gas. It has many similarities to Serica's Rhum field, the company said.
London-based Serica has agreed to drill an exploration well within three years. If any resources are found, the field will be developed via a tie-back to Serica's Bruce field facilities.
Chief Executive Mitch Flegg said: "We are delighted to have received this out of round award. Since we completed our acquisition of the Bruce, Keith and Rhum assets just over a year ago, our strategy has been to optimise economic returns through a hub strategy that includes operating efficiencies, investment and securing new third-party business in the BKR catchment area.
"Not only is this award an important step in our BKR hub strategy, it reinforces exploration as a material part of Serica's upstream business."
"These are exploration prospects and so there is no guarantee of success. In the event of a commercial discovery, the optimal development option will be a tie-back to the Bruce platform, which we would seek to fast track," Flegg continued.
"In the meantime, our other efforts to enhance the value of the BKR assets will continue unabated. These include planning for the rig intervention in 2020 designed to bring the Rhum-3 well into production for the first time and efforts to bring new third-party business to the Bruce facilities."
Serica bought the interests in the BKR fields off oil major BP PLC in November 2017 for an initial GBP12.8 million.
Shares in the company were 3.6% higher on Wednesday morning in London at a price of 125.80 pence each.
By George Collard; georgecollard@alliancenews.com
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Serica Energy (SQZ)