UK: Serica Pleased With Overall 2Q 2010 Operations and Results


Serica Energy plc  today announces its financial results for the three and six months ending 30 June 2010.

Highlights:

Operational:

•Production rates at Kambuna increased during first half of the year – average gas sales of 35 mmscfd in June and 39 mmscfd in July

•Kambuna field operator has reduced its current reserve projections but confirmed that production levels will remain on plateau for several years

•Significant progress made with development of the Columbus field – FEED studies being conducted

•Completed drilling the Conan exploration well in the East Irish sea

•2010 exploration programme continues in North Sea and Indonesia with the Oates well spudded on 30 July

Financial results for first six months:

•Sales revenues of US$ 11.9 million (1H2009 – nil)

•Gross profit of US$ 5.7 million (1H2009 – nil)

•Cash and equivalents at 30 June of US$ 40.0 million (30 June 2009 – US$ 29.0 million)

Outlook for 2H 2010:

•Full Kambuna revenues anticipated with production now at contracted levels

•Results of the Oates exploration well in the UK Central North Sea expected in August – Serica has a 50% interest carried through the well

•Rig being mobilized in August to drill the Dambus and Maridan prospects in the Kutai PSC in Indonesia

•Well site survey to be acquired in August in Slyne Basin, offshore Ireland, in preparation for a drilling programme in 2011

•Exploration well in East Seruway, Indonesia, planned for 2011

•Columbus project sanction expected before the end of the year with first production targeted for early 2013


Paul Ellis, Chief Executive of Serica commented:

“The Kambuna Field is now achieving its targeted field plateau rates and we are expecting these rates to be maintained over the next few years with resultant cash flow benefit to the Company. The reduced projection of ultimate field recovery announced today by the field operator is not expected to affect near term production rates. This projection is based on preliminary down-hole pressure data and will be reviewed again by Serica at the end of the year when more production information is available. In the UK we are pleased with the significant progress that has been achieved with the Columbus development and look forward to gaining project sanction before the end of the year.

On the exploration front we are currently drilling the Oates well in the North Sea and will be following this with two wells in Indonesia. Each of these wells has the potential to add material value to the Company if successful. In the case of the Oates well we have continued our policy of mitigating risk by farming out and our costs relating to the well are being met by a third party.”

Source: SericaEnergy, August 4, 2010:

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