Serica Energy plc has reached agreement with JX Nippon Exploration and Production (U.K.) Limited for the farm-out of UK Central North Sea Block 22/19c (Licence P.1620), in which Serica presently holds a 100 percent interest. The agreement is subject to UK government approval.
Under the agreement, JX Nippon will acquire an operated 85 percent interest in the license, with Serica retaining 15 percent. As consideration, JX Nippon will pay to Serica $250,000 and carry Serica's share of all future costs associated with the license up to and including, at JX Nippon's discretion, the drilling of an exploration well to the Jurassic or deeper.
Serica had previously participated in the drilling of the Oates, Palaeocene Forties sand prospect in 22/19c, with its costs carried by Premier Oil plc ("Premier"). Following lack of success at Oates, Premier relinquished their interest in the license which was retained by Serica. It is the prospectivity of deeper, older strata which is now being pursued.
Tony Craven Walker, Serica's Chairman and Interim Chief Executive said: "We are very pleased to have partnered with JX Nippon in pursuing these technically exciting and relatively new deeper plays in the Central North Sea. Although not a commitment in the current license term, such wells can be physically challenging if drilled and so we have prudently managed that risk by exchanging equity for a carry on the well cost."
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