Serica Energy PLC · LSE:SQZ
Serica Energy — Corporate Update (November 2018)
32 slides from Serica Energy's corporate update, Nov 30, 2018
Slide 1: Serica Energy Plc Investor Presentation: Completion of BKR and BK Acquisitions
SERICA ENERGY PLC INVESTOR PRESENTATION COMPLETION OF BKR AND BK ACQUISITIONS 30 November 2018
Slide 2: Reserves and resources estimates sourced 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 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 30 November 2018
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: 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 7: Reserves and Resources
Reserves and Resources Successive acquisitions delivering significant growth Serica Net 2P Reserves (or 2C Resources) mmboe Serica Interest Post Completion BRUCE 98% KEITH 100% RHUM 50% 7 30 November 2018
Slide 8: Building Shareholder Value with Bruce Keith & Rhum Acquisitions
Building Shareholder Value with Bruce Keith & Rhum Acquisitions Announcement of Total Announcement of E&P transaction Marubeni transaction Announcement of Serica Share Price (GBp) BHP transaction Announcement of BP transaction Completion of of Erskine transaction 8 30 November 2018
Slide 9: Short Term Cash Impact
Short Term Cash Impact Serica Cash Impact $million Interim period post-tax net cash adjustment (including working capital) of $50.0 million Total initial consideration of $21.6 million (made up as previously reported: BP £12.8 million, Total $5.0 million, BHP £1.0 million and Marubeni -$1.0 million)
Slide 10: Financial Impact of Bruce, Keith and Rhum Transactions
Financial Impact of Bruce, Keith and Rhum Transactions ~23,000boe/day net 60mmboe Accelerates use of >$45/boe $50 million production 2018 YTD increased reserves Serica’s tax losses YTD commodity prices have Under the net cash flow Despite operational The acquisition of interests Serica expects to be
Slide 11: Bruce, Keith and Rhum Operations
02 BRUCE, KEITH AND RHUM OPERATIONS 11 30 November 2018
Slide 12: BKR/BK Production Performance
BKR/BK Production Performance 12 30 November 2018
Slide 13: Securing Continued Rhum Production
Securing Continued Rhum Production 30 9 5 SEPT OCT NOV On 30 September 2018 the US Office of On 9 October 2018 Serica announced that On 5 November 2018 Serica announced Foreign Assets Control (“OFAC”) issued a the OFAC had issued a further Licence that the conditions of the License issued to new lic
Slide 14: Rhum Reservoir Management
Rhum Reservoir Management • Serica holds 50% with the remaining 50% held in escrow • Rhum is a gas field producing close to 200mmscfd 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-su
Slide 15: Operations
03 OPERATIONS Maximising economic recovery and life of fields to deliver shareholder value 15 30 November 2018
Slide 16: Serica's North Sea Portfolio
Serica’s North Sea Portfolio 16 30 November 2018
Slide 17: Full Lifecycle Portfolio
Full Lifecycle Portfolio Rowallan: December 2018 spud Columbus: FDP approved BKR and Erskine • The Rowallan well spud is planned for • As operator with a 50% interest, Serica • Serica now has production from four mid-December 2018 is moving the Columbus field towards fields into two platforms over t
Slide 18: 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 19: Erskine Production Performance
Erskine Production Performance 19 30 November 2018
Slide 20: Columbus Development (Serica 50%)
Columbus Development (Serica 50%) In June 2018 Serica submitted the Columbus FDP to the OGA OGA gave approval to the FDP 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 processed on the Shearwat
Slide 21: Rowallan: UK Block 22/19c (Serica 15%)
Rowallan: UK Block 22/19c (Serica 15%) The Ensco 121 Heavy Duty Jack-Up rig is preparing to mobilise to the well location Spud date is targeted for mid-December 2018 Serica is fully carried and so pays no costs for drilling the well The well is targeting Jurassic and Triassic HPHT sandstones below 3
Slide 22: 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 23: About Serica
04 ABOUT SERICA 23 30 November 2018
Slide 24: Our Board
Our Board Tony Craven Mitch Flegg Neil Pike Walker Chief Executive Non-executive Director Executive Chairman • 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 25: 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 26: 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 26 30 November 2018
Slide 27: Teamwork and Ambition
Teamwork and Ambition Build on BP’s impressive operational performance Extend the field life of Bruce, OUR TEAM Keith & Rhum GOAL IS TO: Comply with or surpass HSE legislation and industry standards Encourage a culture of mutual respect 27 30 November 2018
Slide 28: Focus on Safe Working
Focus on Safe Working Serica’s management is committed to providing a Safe, Reliable and Responsible operating environment for all of our staff and contractors. To achieve this the company will strictly adhere to HSE legislation and the best industry standards to ensure that everyone working with us
Slide 29: Operating BKR from our new Operational Headquarters
Operating BKR from our new Operational Headquarters Serica has completed a comprehensive transition and integration process and built an expert team covering all disciplines, working from our new Aberdeen Operational HQ: Offshore Operations Engineering Commercial Supply Chain IT HR 29 30 November 20
Slide 30: A Robust Business Base for Future Growth
A Robust Business Base for Future Growth INVEST GROW BUILD TEAM EXPLORE Investing to Increased scale Commitment to Combining expert Exploring future enhance and diversification operational skillsets for team opportunities production and of revenue excellence with breadth and increase reserves stream
Slide 31: 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 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 30 November 2018