Serica Energy Reports 2006 First Quarter Results
Serica Energy plc (TSX Venture: SQZ; AIM: SQZ) announces its 2006 first quarter results.
- Indonesian government approval received for Serica's Plan of Development for the Kambuna Field offshore north Sumatra. Production targeted for 2008.
- An additional 10% interest acquired in the Glagah Kambuna TAC which contains the Kambuna Field. Serica's interest thereby raised to 65%.
- The Tanjung Perling Field in the neighbouring Asahan block (Serica 55%) has been identified as potentially commercial. The Company is submitting a Plan of Development to the Indonesian Government in May 2006.
- Offer received and negotiations in progress to dispose of non-core 10% interest in Lematang PSC onshore south Sumatra which contains the producing Harimau field and Singa field development.
- Terms of agreement being finalized to secure a jack up drilling rig for a three well exploration program in the Biliton block in Indonesia (Serica 90%). Drilling expected to commence in December 2006 or early 2007.
- In the UK North Sea a rig has been secured for the first well in block 23/16f (Serica 50%), to be spudded in Q4 2006.
Tony Craven Walker, Chairman, commented:
"Serica continued to make good steady progress in the first quarter of 2006. With equipment being secured we expect drilling to commence on core blocks in both Indonesia and the North Sea in the fourth quarter whilst approval of the Plan of Development for the Kambuna Field puts us on track for production start-up in 2008."
Serica has continued to build on its strong 2005 performance during an active first quarter of 2006 for the Company. In Indonesia, the Company has received Government approval of its Plan of Development for the Kambuna Field, has increased its ownership interest in the Glagah Kambuna TAC and is negotiating an offer to dispose of its non-core interest in the Lematang PSC. Serica is also making preparations for exploration drilling both in the UK and in Indonesia to commence later this year.
Serica has received Indonesian government approval of its Plan of Development for the Kambuna Field in north Sumatra. Serica is the operator of the Glagah Kambuna TAC, which contains the Kambuna Field, and has a 55% interest. The Company will conduct a large 3D seismic survey over the block in the third quarter 2006 prior to commencing development well drilling in 2007. First production is scheduled for 2008 and gas sales negotiations are underway.
The Glagah Kambuna TAC is an important asset for Serica and the Company announces that it has acquired an additional 10% interest from PT Gunakarsa Glagah-Kambuna Energi. Following receipt of the required regulatory approvals Serica's working interest in the block will increase to 65%.
In the neighboring Asahan Offshore PSC, in which Serica has a 55% interest, Serica will be submitting a Plan of Development for the Tanjung Perling Field to the Indonesian authorities in May 2006. This follows the 2005 seismic program conducted by the Company which has indicated that the Tanjung Perling Field, in the south of the Asahan block, is of commercial size. Further exploration drilling in this block is scheduled for 2007.
Serica has recently received an offer and is in negotiations to dispose of its 10% interest in the Lematang PSC onshore south Sumatra. This block includes the producing Harimau Field and the Singa Field development. Lematang is not regarded by Serica as a core asset due to the small level of working interest held by the Company and the proceeds from the sale can be better deployed elsewhere in the Company's portfolio.
Preparations for drilling continue. In Indonesia, Serica is currently finalising the terms of an agreement to provide a jack-up drilling rig for the Company's three well exploration program in the Biliton Block, expected to commence in December 2006 or early 2007. Serica has a 90% working interest and is operator of the Biliton PSC, located in the Java Sea.
In the UK North Sea, Serica has announced that it has secured a rig for its first well in Block 23/16f, to be spudded in the fourth quarter 2006 and in which it has a 50% interest and is operator. The Company continues to review options to bring forward exploration drilling on its other blocks but is cautious to avoid incurring excessive drilling costs in the current overly tight rig market.
Serica has started 2006 in a strong financial position and continues to
make significant operational progress in its core areas of the UK North Sea
and Indonesia. Serica remains very positive on its future and its ability to
create shareholder value through exploration drilling and field development
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