Serica Energy PLC · LSE:SQZ
Serica Energy — Corporate Update (January 2019)
32 slides from Serica Energy's corporate update, January 2019
Slide 1: Serica Energy PLC Investor Presentation: Corporate Update
SERICA ENERGY PLC INVESTOR PRESENTATION CORPORATE UPDATE January 2019
Slide 2: Introduction
INTRODUCTION • UKCS focused British independent upstream oil and gas company • Full cycle portfolio of exploration, development and production assets • Field operator with extensive technical and commercial experience • Our aims are to: ‒ add value to existing projects ‒ maximise production and fiel
Slide 3: Bruce, Keith and Rhum Transactions
01 BRUCE, KEITH AND RHUM TRANSACTIONS Building a significant North Sea focused independent operator with diversified revenue streams and a strong balance sheet 3
Slide 4: A Series of Acquisitions
A Series of Acquisitions Four strategically important transactions to purchase interests in Bruce, Keith & Rhum Additional revenue streams • Serica’s strategy has been to reduce reliance on a single producing asset (Erskine) by gaining interests in three diversify production portfolio more producing
Slide 5: Transaction Details
Transaction Details • Transactions effective from 1 January • Additional earn-out structure enables 2018; completed on 30 November 2018 Serica, BP, Total E&P and BHP to share Bruce 98% risk and benefit from future asset • Modest upfront considerations payable on completion performance. BP, Total E&P
Slide 6: Financial Impact of Bruce, Keith and Rhum Transactions
Financial Impact of Bruce, Keith and Rhum Transactions 2018 Net Production 60mmboe Accelerates use of >$45/boe $50 million >24,000boe/day increased reserves Serica’s tax losses 2018 commodity prices Under the net cash flow Despite operational The acquisition of interests Serica expects to optimise w
Slide 7: Impact of BKR Transactions
02 IMPACT OF BKR TRANSACTIONS 7
Slide 8: Successful Acquisition Strategy
Successful Acquisition Strategy Building a North Sea production portfolio 5 Bruce and Keith interests from Marubeni (announced November 2018) 4 Bruce and Keith interests from BHP (announced November 2018) 3 Bruce and Keith interests from Total E&P (announced August 2018) Total reserves 63.7 mmboe 2
Slide 9: Building Shareholder Value with Bruce Keith & Rhum Acquisitions
Building Shareholder Value with Bruce Keith & Rhum Acquisitions 160 Completion of BP, Total E&P, BHP and Marubeni transactions Announcement of Total Announcement of 140 Marubeni transaction E&P transaction Announcement of 120 Serica Share Price (GBp) BHP transaction Announcement of BP 100 transactio
Slide 10: Serica is now a Leading Independent Producer on the UKCS
Serica is now a Leading Independent Producer on the UKCS 140 Non-operated UKCS net production 120 (2019e kboe/d, excludes Majors and NOC’s) Operated 100 80 60 40 20 0 Source: Wood Mackenzie 10
Slide 11: Serica is the 8th Largest Independent Operator on UKCS
Serica is the 8th Largest Independent Operator on UKCS 120 100 UKCS ranking of gross operated production (2019e kboe/d, excludes Majors and NOC’s) 80 60 40 20 0 Source: Wood Mackenzie 11
Slide 12: Bruce, Keith and Rhum Operations
03 BRUCE, KEITH AND RHUM OPERATIONS 12
Slide 13: BKR 2018 Production Performance
BKR 2018 Production Performance Net BKR Production (boe/day) 35,000 30,000 25,000 20,000 2018 net production 15,000 >24,000boe/day 10,000 5,000 - Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 13
Slide 14: Transition Completed without Incident
Transition Completed without Incident 114 BP staff transferred 23 new jobs created 315,000 controlled documents transferred 1.8 million BP project files received and processed 138 procurement contracts re-negotiated 14
Slide 15: Improving Efficiency and Morale
Improving Efficiency and Morale On Day One Serica switched crew transition to a single, direct flight • 3850 fewer flying hours per annum • 160 fewer nautical miles per flight • Minimising exposure to weather delays • Reducing transport costs 15
Slide 16: Rhum Reservoir Management
Rhum Reservoir Management • Rhum is a gas field with producing capacity close to 185mmscfd gross from two subsea wells tied back to Bruce, R1 and R2 • A third well (R3) was drilled but never put into production due to technical issues • A jack-up or semi-sub rig is required to carry out the work to
Slide 17: Other Operations
04 OTHER OPERATIONS Maximising economic recovery and life of fields to deliver shareholder value 17
Slide 18: Serica's North Sea Portfolio
Serica’s North Sea Portfolio 18
Slide 19: Full Lifecycle Portfolio
Full Lifecycle Portfolio Rowallan: December 2018 spud Columbus: FDP approved BKR and Erskine • The Rowallan well spudded in December • As operator with a 50% interest, Serica • Serica now has production from four 2018 using the Ensco 121 heavy duty is moving the Columbus field towards fields into tw
Slide 20: Erskine Field Flowing at Full Capacity
Erskine Field Flowing at Full Capacity A 26km section of the condensate export line from Lomond to the CATS Riser Platform has been replaced The pipelay was completed without incident and within budgeted time A regular pigging programme has commenced on the new line in order to prevent wax build up
Slide 21: Erskine 2018 Production Performance
Erskine 2018 Production Performance Net Erskine Production (boe/day) 4,500 4,000 3,500 3,000 2,500 2018 net 2,000 production >600boe/day 1,500 1,000 500 - Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 21
Slide 22: Columbus Development (Serica 50%)
Columbus Development (Serica 50%) Columbus development sanctioned by Serica and Columbus Partners FDP submitted in June 2018 and approved by OGA in October 2018 The Columbus development area will be drained by a single producing well tied into the recently approved Arran to Shearwater pipeline and p
Slide 23: Rowallan: UK Block 22/19c (Serica 15%)
Rowallan: UK Block 22/19c (Serica 15%) Well spudded on 30 December 2018 with estimated duration of ~140 days The well is targeting Jurassic and Triassic HPHT sandstones below 4,000m Serica is fully carried and so pays no costs for drilling the well Approx. 20 mmboe P50 prospective resources net to S
Slide 24: UK 30th Round Awards
UK 30th Round Awards Serica has been awarded licences in three strategic areas in the Central North Sea: Rowallan South West of Columbus Skerryvore/Ruvaal (20%) (50%) (20%) • The Rowallan Prospect • Advanced seismic • Significant prospects is mapped to continue techniques have identified through sei
Slide 25: About Serica
05 ABOUT SERICA 25
Slide 26: Our Board
Our Board Tony Craven Walker Mitch Flegg Neil Pike Executive Chairman Chief Executive Non-executive Director • A leading figure in the British independent • Over 35 years’ experience in the • Involved in the global petroleum oil industry since the early 1970s, having upstream oil and gas industry, i
Slide 27: Our Board
Our Board Ian Vann Trevor Garlick Malcolm Webb Non-executive Director Non-executive Director Non-executive Director • Joined BP in 1976 • Over 35 years’ experience in North Sea • Joined Burmah Oil in 1974 as a legal adviser Upstream operations and development • Directed and led BP's global explorati
Slide 28: Senior Management Team
Senior Management Team Clara Altobell Andy Bell Stephen Lambert VP Technical VP Finance VP Commercial Mike Killeen Danny Fewkes Carol Stewart VP Operations Group Treasurer Business Manager 28
Slide 29: A Two-Tier Strategy to Deliver Growth
A Two-Tier Strategy to Deliver Growth Integrate team and technology to maximise efficiency • transition complete • talented, motivated team in place • Aberdeen HQ fully operational • focus on economic recovery of oil & gas • encourage creativity to extend life of field Use newly-earned scale and pro
Slide 30: Disclaimer
Disclaimer • The information presented herein is subject are not limited to, regulatory changes, • Resource disclosure in this presentation has, to amendment and has not been future levels of supply and demand, pricing, except where noted, been prepared by the independently verified. Serica Energy p
Slide 31: Reserves and resources estimates taken from Competent Persons' Reports
All reserves and resources estimates quoted in this presentation are taken from the relevant Competent Persons’ Reports • Bruce, Keith and Rhum assets – Ryder Scott CPR , 1 August 2018 • Erskine, Columbus and Rowallan assets – Netherland, Sewell and Associates CPR, 31 October 2018 These CPR’s are pu
Slide 32: For further information visit www.serica-energy.com
For further information visit www.serica-energy.com or e-mail info@serica-energy.com 32