Serica Energy Farms-out Stake in Oak Prospect
Serica Energy has concluded a farm-out of part of its interest in UK North Sea Block 54/1b, where it expects to commence drilling the Oak prospect later this month. Serica will also commence drilling of an exploration well on the Columbus prospect in Block 23/16f during the fourth quarter of 2006.
In the Southern Gas Basin, the ENSCO 92 jack-up rig will drill the Oak prospect in Block 54/1b, targeting the Permian-aged Leman sandstone reservoir at a depth of around 7,500 feet. Drilling operations are scheduled to take about 30 days. Serica is the operator of the Block and the well will be drilled under a contract with Peak Well Management Limited.
As part of its strategy to spread exploration risk and manage costs, Serica will reduce its interest in Block 54/1b from 100% to 50% through the farm out of a 50% interest to Centrica Resources Limited ("Centrica"), a wholly-owned subsidiary of Centrica plc, in consideration for Centrica bearing 100% of the costs of drilling the Oak well up to the point where the total costs have reached (pnds stlg)8.5 million or a decision to test the well has been made, whichever occurs first.
In the Central North Sea, the semi-submersible GlobalSantaFe Rig 140 will drill the Columbus prospect in Block 23/16f, in which Serica has a 50% interest, targeting the Paleocene-aged Forties Sandstone reservoir at a depth of around 9750 feet. Drilling operations are scheduled to take about 30 days. The well will be drilled by Applied Drilling Technology Inc. (ADTI), a division of GlobalSantaFe Corporation, under a contract with Serica's partner in Block 23/16f, Endeavour Energy UK Limited.
Chris Atkinson, Chief Operating Officer, commented:
"The next 12 months will be an exciting period for Serica with intensive drilling across our assets targeting a range of prospects in terms of risk and reward. This includes exploration wells on Block 54/1b and Block 23/16f in the North Sea this year and exploration and development wells in Indonesia in 2007."
"The farm out in Block 54/1b reduces drilling costs and exploration risk
to the Company ahead of the drilling of the Oak prospect, and we welcome
Centrica as our new partner in the Block."
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