Serica Energy Acquires BP’s Assets in UK North Sea
Serica Energy, a British independent oil and gas exploration and production company, on Monday announced the signing of an agreement to acquire the entirety of BP’s stake in the P111 and P2544 licences, located in the UK Central North Sea, for an upfront cash consideration $232 million.
The Proposed Acquisition has an economic date of 1 September 2025 and is subject to customary working capital adjustments and partially offset by the receipt of a payment reflecting interim post-tax cashflows between the economic date of the transaction and the completion date, expected around the end of 2025.
The proposed acquisition, which is taking place despite the challenging tax regime in the country’s oil and gas sector, comprises a 32% non-operated working interest in the P111 licence, containing the Culzean gas condensate field, and P2544, an exploration licence adjacent to the P111 licence.
The Culzean field, operated by TotalEnergies, is currently the largest single producing gas field in the UK North Sea. As per the terms of the joint operating agreement between the Culzean field partners, the today’s acquisition is subject to a pre-emption period which runs for 30 days, with each of the Culzean field partners (TotalEnergies, 49.99%, and NEO NEXT, 18.01%) having the option to acquire BP’s stake in the licences on the same terms as those agreed by Serica.
Serica Energy’s CEO Chris Cox said that 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, he said.
Key Terms
The terms of the proposed acquisition also include provision for two further cash payments contingent on successful results and production from a large exploration opportunity on the P2544 licence; and changes to the UK ring-fence fiscal regime.
The Company can fund the consideration through a combination of interim cashflows from the Culzean interest and existing financial resources (including cash and undrawn amounts under the existing $525 million Reserve Based Lending facility).
The company is however also considering putting in place a new acquisition facility, which would be refinanced in due course via increased debt facilities to reflect its larger, more diversified and cash generative asset base inclusive of the Prax and Culzean acquisitions, which the company estimates would support a larger borrowing base.
Culzean is a mid-life gas condensate field, operated by TotalEnergies, located in the Central North Sea. It was discovered in 2008, and came onstream in 2019. It is currently the largest gas field on the UK Continental Shelf by production, with production net to BP of c.25,500 BOEPD in H1 2025, at an exceptionally high operating efficiency of 98%.
Lambert Energy Advisory is acting as financial adviser to Serica in connection with the Proposed Acquisition.
