Serica Energy Regulatory News (SQZ)

14 Dec 2006 15:00

Serica Energy plc14 December 2006 For immediate release: Thursday, December 14, 2006 Serica Energy plc ("Serica" or "the Company") Award of new Indonesian Production Sharing Contract and UK drilling update London, December 14th, 2006 - Serica Energy plc (AIM and TSX Venture: SQZ) ispleased to announce that it has been awarded the Kutai Production SharingContract ("the PSC"), and provides a UK drilling update. Award of new Indonesian PSC The Kutai PSC covers an area, both onshore and offshore, of approximately 4729sq km within the prolific Kutai Basin of East Kalimantan, Indonesia. Serica isthe operator of the PSC and will hold a 52.5% interest in the Block. Serica'spartner, PT Ephindo, will hold the remaining 47.5% interest. The PSC containsseveral previously drilled wells that successfully established the presence ofhydrocarbons. Serica will be acquiring a limited amount of new 2D and 3D seismicto augment the pre-existing seismic data set, as part of its work programme toassess the prospectivity of the block, which will also include the drilling ofup to four exploration wells. Chris Atkinson (Chief Operating Officer) commented:'We are delighted to have been awarded this extremely promising Indonesian PSC,which fits in with our strategy to expand our South East Asia portfolio into newareas in which we have specific technical knowledge. Our technical team and ourpartner, PT Ephindo, have a detailed understanding of the Kutai Basin whichcomprises Indonesia's second most prolific petroleum province. Serica is verymuch looking forward to exploring this area under better fiscal terms than werepreviously available and with the benefit of modern 3D seismic data and thelatest interpretation techniques." UK Drilling Update Unusually extreme weather conditions are currently being experienced in the UKNorth Sea and therefore it has not yet been possible to commence testing theColumbus well in Block 23/16f. However, Serica expects to be able to commenceflowing the well within the next week and results of the tests should beavailable by the end of the month. Paul Ellis (Chief Executive Officer) commented:"We remain very positive about the potential of the prospect being targeted bythe Columbus well in the UK North Sea and by its implications for theprospectivity of the new acreage that we are acquiring in Block 23/21 throughour recent agreement with BG Group. We look forward to being in a position toannounce the results of the tests in the near future." Information on the Kutai PSC The Kutai PSC comprises several contiguous blocks, most of which were the resultof first phase relinquishments by the current main operators in the basin,Total, Chevron and VICO. The PSC lies in and around several giant fieldsincluding Tunu (>1.600mmboe) and Attaka (>800mmboe). The blocks forming the PSC straddle the prolific Mahakam River delta bothonshore and offshore in water depths that range from zero in the west to lessthan 200 metres at the eastern margin. The adjacent major fields on the shelfwere mainly discovered in the late 1960's and 1970's by Total, Unocal and VICO.To date the area has produced over two billion barrels of oil and 20 trillioncubic feet of gas and is currently providing over four billion cubic feet of gasper day to the Bontang LNG facility under long term contracts to supply gas intothe rapidly expanding markets of northern Asia. Background Notes In Indonesia, Serica also operates the Biliton PSC, the Asahan Offshore PSC andthe Glagah Kambuna TAC and the drilling of six exploration, development andappraisal wells across the assets is scheduled in 2007. Enquiries: Serica Energy plcPaul Ellis, pellis@serica-energy.com +44 (0)20 7487 7300Chief Executive OfficerChris Hearne, chearne@serica-energy.com +44 (0)20 7487 7300Finance Director Pelham Public Relations -UKJames Henderson james.henderson@pelhampr.com +44 (0)20 7743 6673AlisdairHaythornthwaite alisdair.haythornthwaite@pelhampr.com +44 (0)20 7743 6676 CHF Investor Relations - CanadaJan Moir jan@chfir.com +1 416 868 1079 x237Heather Colpitts heather@chfir.com +1 416 868 1079 x223 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 there from. 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 heather@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