Serica Energy said that it has made an agreement with BP to extend the completion timetable for the Bruce, Keith and Rhum (BKR) transaction in the UK North Sea for one month until early November 2018.
Image: EnQuest to acquire BP's 75% stake in the Magnus oilfield in the North Sea. Photo: courtesy of WhisperToMe/Wikipedia.org.
This extension is to enable outstanding regulatory and partner consent processes to be completed, including processes by the US Office of Foreign Assets Control (OFAC) relating to the Rhum Field.
These consents are part of the conditions for completion as set out when the BKR transaction was announced.
For operational and logistical reasons to ensure a safe and efficient transfer of ownership and operations, they are required a few weeks before transfer of operations can commence.
Serica and BP are working closely together and are committed to achieving this new timetable. The terms of both the BP transaction and the related transaction with Total remain unchanged.
In particular, Serica continues to be entitled to a share of net cash flows from the BKR Assets relating to the BP and Total interests during the period from the effective date of the BP and Total acquisitions (1 January 2018) to the date of Completion. This will continue to be the case under the extended timeline, with gas prices achieving record levels during the effective period since the start of the year.
All other transition requirements, including transfer of offshore and onshore staff, readiness of operating, safety and environmental procedures and transfer of all contractual obligations, are ready to complete once all outstanding consents have been received.
Serica has made good progress with the acquisition and transition programme, working closely with BP, and will be ready to assume operatorship of the BKR Assets once the outstanding conditions have been met.
Serica Energy CEO Mitch Flegg said: “We have taken the decision to extend the completion period on BKR as a practical measure that provides additional time for the approvals process to complete.
“We are working closely with the various authorities and with field partners to satisfy all remaining conditions and we appreciate the commitment that the relevant parties are making as we near completion of this complex transaction.
“Serica is well prepared to assume operatorship of the assets. Together with BP, we remain fully committed to completing the BKR deal.
“Completion of these important transactions will enable Serica to assume operatorship and optimise the full performance of these valuable UK offshore assets, extend producing life where possible and ensure maximum recovery of remaining reserves.
“Coming at a time of strong gas prices and significantly improved oil prices the Company is set to benefit from the resultant strong cash flows which have occurred since the start of the year, as well as from resumed production at Erskine which is expected to occur later this month as planned. We look forward to achieving these objectives and remain on track to do so.”
Technical Information
The technical information contained in the announcement has been reviewed and approved by Clara Altobell, VP Technical at Serica Energy plc. Clara Altobell (MSc in Petroleum Engineering from Imperial College, London) has over 20 years of experience in oil & gas exploration, production and development and is a member of the Society of Petroleum Engineers (SPE) and the Petroleum Exploration Society of Great Britain (PESGB).
Source: Company Press Release