Serica is to carry out a review of strategic alternatives for its Indonesian assets.
As the result of increased focus on upcoming projects in the UK, Western Europe and Africa, Serica will examine a range of options to create shareholder value including:
Serica will make a further announcement once a strategic decision has been reached, but may ultimately decide to make no changes. Jefferies International Limited has been retained by Serica as financial adviser for the strategic review.
Serica's Indonesian assets are within an ongoing, self-funding business with significant cash flow, managed by an experienced and well-established team of industry professionals based in Jakarta. The assets include a 25% interest in the producing Kambuna gas/condensate field, operated interests in a further two Production Sharing Contracts and significant new venture opportunities which are currently being pursued. In the operated Kutai PSC, Serica is currently drilling the Marindan-1 exploration well, the results of which are expected this month.
Paul Ellis, Chief Executive of Serica, commented, "For some time we have been concerned that the underlying value of our Indonesian business has not been fully recognised and the board has therefore decided to review the alternatives. As reported in our recent third quarter Results, the Kambuna field is now producing at higher rates than ever before. Under the terms of the Kambuna Production Sharing Contract the value of the field to Serica is driven more by production and cash flow than by reserves and we would expect to see this reflected in any proposals we receive during this review.
Serica sees more opportunity for growth outside of Indonesia. This was a further reason for conducting the review, which we expect will be concluded early next year."
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