Serica Energy Regulatory News (SQZ)

7 Jun 2007 13:30

Serica Energy plc07 June 2007 SERICA ENERGY TO RETAIN 50% INTEREST IN NORTH SEA COLUMBUS DISCOVERY WELL London, June 7, 2007 - Serica Energy (UK) Limited ("Serica") and BGInternational Limited ("BG") have mutually agreed not to complete thetransaction, announced on November 14, 2006, under which Serica would haveexchanged a 25% interest in Block 23/16f (containing the Columbus discovery) fora 25% interest in the neighbouring Block 23/31, operated by BG. Serica and BGhave agreed to continue to pursue the development of Columbus for their mutualbenefit and that of their respective co-venturers. Serica, as Operator of Block 23/16f, will now retain its 50% interest in theBlock and in the Columbus discovery well and will press forward with appraisalof the discovery and potential early development. Discussions have alreadycommenced with nearby infrastructure owners with a view to reaching adevelopment sanction decision by the end of the year in the event of asuccessful outcome to appraisal drilling. Serica has contracted the SEDCO 704 drilling rig to drill up to two Columbusappraisal wells in Block 23/16f commencing in the third quarter of this year. Paul Ellis, Chief Executive of Serica, said that, "We are confident that, with the positive results already obtained from theColumbus discovery well, the field is capable of rapid appraisal and developmentand we intend to press ahead with this programme as a high priority,particularly given our increased stake in the project." Background Notes: Serica announced the results of the first well drilled on Columbus on 20thDecember 2006. The well encountered a gross gas column of at least 125 feet inthe Palaeocene Forties sandstone. A total of 85 feet of the reservoir was testedand the stabilised average production rates on a 56/64 inch choke during a fivehour period were 17.5 million cubic feet of gas per day and 1,060 barrels perday of 47.5 degrees API condensate. The wellhead flowing pressure was 1,200pounds per square inch and the inert gas content was less than 2%. On the basis of an independent report carried out by RPS Energy Limited onbehalf of Serica following the drilling of the discovery well, the most likelynet contingent resources of oil equivalent lying in Block 23/16f attributable toSerica's 50% interest are 10.8 million barrels. The purpose of the appraisalwells to be drilled this year is to confirm the most likely resource figures andinvestigate the potential upside to these figures, while obtaining the furtherdata required to refine the development concepts. Serica's partners in Block 23/16f are Endeavour Energy UK Limited (25%) and EOGResources United Kingdom Limited (25%). Enquiries:Serica Energy plcPaul Ellis, paul.ellis@serica-energy.com +44 (0)20 7487 7300Chief Executive OfficerChris Hearne, chearne@serica-energy.com +44 (0)20 7487 7300Finance Director JPMorgan CazenoveSteve Baldwin steve.baldwin@jpmorgancazenove.com +44 (0)20 7588 2828 Pelham Public Relations-UKJames Henderson james.henderson@pelhampr.com +44 (0)20 7743 6673AlisdairHaythornthwaite alisdair.haythornthwaite@pelhampr.com +44 (0)20 7743 6676 CHF - CanadaJan Moir jan@chfir.com +1 416 868 1079Kelly Cody kelly@chfir.com +1 416 868 1079 Forward Looking Statements This disclosure contains certain forward looking statements that involvesubstantial known and unknown risks and uncertainties, some of which are beyondSerica Energy plc's control, including: the impact of general economicconditions where Serica Energy plc operates, industry conditions, changes inlaws and regulations including the adoption of new environmental laws andregulations and changes in how they are interpreted and enforced, increasedcompetition, the lack of availability of qualified personnel or management,fluctuations in foreign exchange or interest rates, stock market volatility andmarket valuations of companies with respect to announced transactions and thefinal valuations thereof, and obtaining required approvals of regulatoryauthorities. Serica Energy plc's actual results, performance or achievementcould differ materially from those expressed in, or implied by, these forwardlooking statements and, accordingly, no assurances can be given that any of theevents anticipated by the forward looking statements will transpire or occur, orif any of them do so, what benefits, including the amount of proceeds, thatSerica Energy plc will derive therefrom. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. To receive Company news releases via email, please contact kelly@chfir.com and specify "Serica press releases" in the subject line. This information is provided by RNS The company news service from the London Stock Exchange