Serica Energy Eyes Acquisition of BP’s North Sea Assets

Serica Energy plc (AIM: SQZ) has announced a proposed acquisition of BP's stakes in the P111 and P2544 licenses in the UK Central North Sea, a move that could significantly bolster the company's production and cash flow.

The deal, subject to pre-emption rights, includes a 32% non-operated working interest in the Culzean gas condensate field, currently the largest producing gas field in the UK North Sea, and an adjacent exploration license.

The key terms of the proposed acquisition feature an economic date of September 1, 2025, and an upfront cash consideration of $232 million.

The company said the figure will be partially offset by interim post-tax cashflows received between the economic date and the expected completion around the end of 2025.

Further cash payments are contingent on the exploration success of the P2544 license and potential changes to the UK ring-fence fiscal regime.

Serica anticipates funding the acquisition through a combination of interim cashflows from the Culzean interest and existing financial resources, including a $525 million Reserve Based Lending facility.

The company is also considering a new acquisition facility, with plans to refinance it through increased debt facilities, reflecting a larger and more diversified asset base following the Prax and Culzean acquisitions.

Culzean, operated by TotalEnergies, boasts high operating efficiency at 98% and low carbon footprint.

BP's net production from Culzean in the first half of 2025 was approximately 25,500 boepd.

Remaining net 2P reserves are estimated at around 33 mmboe as of January 1, 2025. The production cost is $10.7/boe, with emissions significantly below the UK North Sea sector average.

The acquisition is subject to a 30-day pre-emption period, during which TotalEnergies (49.99%) and NEO NEXT (18.01%), the other Culzean field partners, can opt to acquire BP's stake on the same terms.

Chris Cox, Serica's CEO, stated: “Should this transaction complete, it would deliver a step-change for Serica, adding material production and cash flows from the largest producing gas field in the UK. Culzean is a world-class asset, delivering gas from a modern platform with exceptionally high uptime and low emissions.”