Serica Energy has announced the acquisition of North Sea operations from Centrica’s Spirit Energy Limited worth £57 million.
Serica says the deal strengthens its position in the Southern North Sea and is expected to generate substantial cash flow. Centrica is disposing of the assets as part of its effort to maximise ‘value as it continues to reposition its infrastructure portfolio’.
The acquisition includes a 15% stake in the Cygnus field, one of the UK Continental Shelf’s largest producing gas fields. Serica will also gain interests in Clipper South, the Greater Markham Area, and several other gas fields including Eris, Ceres, and Galleon.
The transaction promises immediate returns for Serica, with the acquired assets expected to generate approximately $100 million in free cash flow by the end of 2028. This cash generation will support Serica’s growth strategy and enhance shareholder returns.
The deal adds 18.7 million barrels of oil equivalent in proven and probable reserves to Serica’s portfolio. This represents a 16% increase in the company’s reserves at a cost of just $3.9 per barrel equivalent.
Production capacity will increase by around 13,500 barrels of oil equivalent per day in the first half of 2025, with 96% of this production consisting of gas.
“This transaction is a further step towards delivering on our strategy and diversifying our asset base through the addition of high-quality assets, adding over 15% to our reserves and significantly boosting production,” said Chris Cox, Serica’s CEO.
“These are also assets I personally know well, and the Cygnus field in particular is an attractive addition to our portfolio given its high uptime, low emissions, and low operating costs. There is also the potential for further infill drilling opportunities across the portfolio, most significantly at Cygnus, where drilling is ongoing.
“The transaction will require only modest cash outflow on completion and is set to generate material cash flows, while also limiting our exposure to future decommissioning costs, enhancing Serica’s ability to create further value for shareholders through investing in growth and delivering attractive cash returns.”
The acquisition establishes Serica as an operator in the Southern North Sea, allowing the company to deploy its expertise in mature asset management. This diversifies Serica’s presence across the UK Continental Shelf and provides access to multiple hydrocarbon evacuation routes.
The Cygnus field stands out as a particularly attractive asset. With operating costs of approximately $11 per barrel equivalent and 97% operating efficiency, it represents a low-cost operation. The field’s carbon intensity of 7 kilograms of CO2 per barrel equivalent is well below the North Sea average.