Operations Update/FarmoutSerica Energy PLC(C:SQZ)
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Monday March 23 2009 - News Release
Mr. Paul Ellis reports
SERICA ENERGY ANNOUNCES VIETNAM FARM-OUT AND OPERATIONAL UPDATE
Serica Energy PLC has agreed to the terms of a farm-out of partof its interest in block 06/94 offshore Vietnam and provides an operationalupdate of its activities in Indonesia, where production is expected in thesecond quarter, and in Ireland, where drilling is expected to commence in May.
Vietnam farm-out
Serica has reached agreement with Australian Worldwide ExplorationLtd. (AWE) on the terms of a farm-out of part of Serica's interest in theblock 06/94 Production Sharing Contract offshore Vietnam ("the PSC"). Theagreement is subject to the waiver of a pre-emptive right held byPetroVietnam, the Vietnamese State oil and gas company, and to the approval ofthe government of Vietnam.
Under the agreement, AWE will bear Serica's 33.33% share of the costs ofthe three well drilling programme in the PSC, subject to a financial cap, inorder to earn an interest of 23.33% in the PSC, with Serica retaining a 10%interest.
The Ocean General drilling rig is expected to arrive on location in block06/94 for the Tuong Vi exploration well in June 2009. The second and thirdexploration wells on the block are not expected to be drilled until 2010.
Operational Update
Indonesia: In the Kambuna field development (Serica 50%), the 58kilometre offshore and onshore pipeline has been laid and tested. The offshoreplatform topsides were successfully installed this month and offshore hook-upand commissioning are in progress. Work continues with the construction of theonshore gas reception facility and first gas is scheduled for June 2009. Inthe Kutai PSC (Serica 54.6%), offshore and onshore East Kalimantan, the 280kilometre onshore 2D seismic survey is being recorded.
Ireland: Serica expects shortly to secure a drilling rig to drill theBandon exploration prospect off the west coast of Ireland in Licence PEL 01/06with drilling planned to commence in May. This gas prospect has a potentialresource range of 230 billion cubic feet to 1.7 trillion cubic feet. Serica'scosts on this well will be largely carried by RWE-DEA, which is farming in toearn a 50% interest in the Licence, with Serica remaining operator andretaining 50%.
Paul Ellis, Serica's Chief Executive Officer, said:
"Serica continues to make strong progress on a number of fronts withdevelopment of the Kambuna field in Indonesia now well on course for first gasproduction in the second quarter of this year. The successful farm-outs inboth Ireland and Vietnam enable the Company to retain material upside to thenear-term drilling programme in these two highly prospective blocks whilstsubstantially reducing the costs".
The technical information contained in the announcement has been reviewedand approved by Peter Sadler, Chief Operating Officer of Serica Energy plc.Peter Sadler is a qualified Petroleum Engineer (MSc Imperial College, London,1982) and has been a member of the Society of Petroleum Engineers since 1981.
© 2009 Canjex Publishing Ltd.