Serica Energy Plc · LSE:SQZ
Serica Energy — Merger or Acquisition (November 2017)
26 slides from Serica Energy's merger presentation, November 2017
Slide 1: Serica Acquisition of BP Interests in Bruce, Keith and Rhum fields
Serica Acquisition of BP Interests in Bruce, Keith and Rhum fields November 2017
Slide 2: A Transformational Acquisition for Serica
A Transformational Acquisition for Serica ▪ Serica to purchase BP interests in the Bruce (36%), Keith (34.83%) and Rhum (50%) North Sea fields ▪ Significant increase in reserves and production ▪ Sixteen-fold increase in net reserves ▪ Seven-fold increase in net production ▪ Includes transfer of oper
Slide 3: Transaction Overview
Transaction Overview
Slide 4: Main Features of the Transaction
Main Features of the Transaction ▪ Transaction effective from 1 January 2018; completion Serica’s North Sea portfolio targeted for mid-2018 subject to regulatory, government and partner consents ▪ Initial Consideration of £12.8m cash payable on completion ▪ Deferred consideration payable against per
Slide 5: Repositions Serica in the North Sea
Repositions Serica in the North Sea 2017 estimate UKCS WI production ranking ▪ Serica will become the 3rd largest quoted of European independents European independent on the UKCS by Working interest production (kboepd) production. The acquired assets: 0 10 20 30 40 50 Chrysaor • averaged net H1 2017
Slide 6: Transaction Details
Transaction Details Structure designed to control risk and minimise shareholder dilution: ▪ £12.8m Initial Consideration payable on completion - anticipated mid-2018 ▪ Expected to be covered by interim net cash flows from the acquired assets ▪ Further cover provided by existing cash balances and gas
Slide 7: Product Sales Arrangements
Product Sales Arrangements ▪ Serica will sell its share of Bruce, Keith and Rhum gas, oil and NGL production to BP entities ▪ The sale of production, consisting largely of gas, is at standard spot market prices ▪ To minimise downside risk and retain upside potential, 60% of 2018, 60% of 2019 and 40%
Slide 8: Significant Production & Reserves Growth
Significant Production & Reserves Growth Net production by field (kboepd in H1 2017)* Production Erskine Pro-forma Bruce ▪ On the basis of H1 2017 production rates*, Serica’s net Keith 4.4 0.5 Serica pre-Bruce, production would increase some seven-fold from Keith and Rhum Rhum approximately 3,000 bo
Slide 9: Asset Overview
Asset Overview
Slide 10: Bruce, Keith and Rhum – Location of assets
Bruce, Keith and Rhum – Location of assets The Bruce, Keith and Rhum UK Norway assets are located in the UK Northern North Sea, with RHUM access to established infrastructure BRUCE The acquisition of these KEITH assets will help diversify Forties and balance Serica’s North Sea portfolio Source: Wood
Slide 11: Bruce – Late life asset with untapped value
Bruce – Late life asset with untapped value Bruce (36%) Bruce gas field is located in blocks 9/9a, 9/8a and 9/9b in the Northern North Sea Partners: Total, BHP Billiton, Marubeni, BP Operator: Serica (post completion) ▪ Producing via 21 active production wells with aggregate average gross production
Slide 12: Keith – Mature asset with residual value to 2019
Keith – Mature asset with residual value to 2019 Keith (34.83%) Keith Ownership Keith field is located in block 9/8a in the Northern (post completion) North Sea, 6.8 km to the southwest of Bruce Marubeni 8.34% Partners: Total, BHP Billiton, Marubeni Operator: Serica (post completion) Serica Total 34
Slide 13: Rhum – Strategic UK gas asset with significant potential
Rhum – Strategic UK gas asset with significant potential Rhum (50% WI) Bruce facilities Rhum gas field is located in block 3/29a, 44 km north of Bruce and is a subsea development tied back to the Bruce platform via an insulated pipeline From Keith Partner: IOC (50%) Operator: Serica (post completion
Slide 14: Maximizing Economic Recovery
Maximizing Economic Recovery ▪ Serica intends to build upon BP’s operational performance at Bruce, Keith and Rhum to extend field life ▪ Serica’s position as a focused, flexible and financially robust independent will allow it to pursue valuable upside potential to the benefit of Serica, BP (via the
Slide 15: Transaction Timetable
Transaction Timetable Announcement Transitional Phase Completion 21 November 21 November Mid 2018 2017 through H1 2018 (target) ▪ Transaction ▪ Admission Document released and General ▪ Serica becomes announced on 21 Meeting of Serica’s shareholders held to operator of the Bruce, November 2017 appro
Slide 16: Team and Integration
Team and Integration
Slide 17: Serica Board and Management Structure
Serica Board and Management Structure Tony Craven Walker Ian Vann Neil Pike (Executive Chairman) (Non-executive Director) (Non-executive Director) Originally a petroleum Directed and led Responsible for engineer with BP BP's global Citibank's exploration from relationships with the Founded and built
Slide 18: Organisation Structure Post-Transaction
Organisation Structure Post-Transaction London Aberdeen Executive Chairman Tony Craven Walker CEO Mitch Flegg VP Finance VP Technical VP Commercial HSE Manager VP Operations Andy Bell Clara Altobell Stephen Lambert tbc tbc Group Treasurer Inherited Technical Team Danny Fewkes BP Asset Team Finance T
Slide 19: Taking Care of Our Staff
Taking Care of Our Staff A safety-conscious, career- enhancing organisation ▪ All BP staff working the majority of their time on the Bruce, Keith and Rhum assets are expected to transfer to Serica ▪ A transition plan is being put in place and it is anticipated that the change of ownership will take
Slide 20: Track Record and Future
Track Record and Future
Slide 21: Proven Operational Track Record
Proven Operational Track Record Serica has an operational record ranging from exploration and field discovery through to development: ▪ Highly experienced, reputable and strengthened management with very successful track record ▪ Operated the discovery, appraisal and early stage development of the K
Slide 22: Serica's Financial Performance
Serica’s Financial Performance Highlights: Serica’s net cash position (£GBPm)* 25 £17.4m +450% 20 Net cash (£GBP million) Serica’s H1 2017 Serica’s growth in 15 revenue share price since (vs £1.4m in H1 2015) 1 January 2015 23.6 10 14.7 15.7 13.4 5 8.8 Strong balance sheet Transaction will and innov
Slide 23: Strongly Positioned for the Future
Strongly Positioned for the Future ▪ Acquisition of Bruce, Keith and Rhum effective from 1 January 2018 ▪ Completion anticipated mid-2018 ▪ Serica production expected to increase materially ▪ Opportunities for further cost reductions ▪ 60% of 2018 , 60% of 2019 & 40% of H1 2020 retained share of gas
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Slide 25: Disclaimer
Disclaimer • This presentation, which has been prepared by Serica Energy plc (the "Company"), is strictly confidential and is being provided to you solely for your information and use at the investor presentation by the Company concerning the proposed acquisition of BP Exploration Operating Company
Slide 26: Disclaimer (continued)
Disclaimer (continued) • If you are not a Relevant Person you should not have received this Presentation and should return this Presentation to an officer of the Company or to the Company's registered office as soon as possible and take no other action. The information contained in this Presentation
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