Shares in Serica Energy fell over nine per cent Monday following news the oil and gas company abandoned two blocks in the North Sea and was operating on 'limited cash resources'.
In an operations update, the company said it has decided to relinquish blocks 210/19a and 20a in the northern North Sea as it "did not receive sufficient proposals to enable a well to be drilled".
However, the group reported significant progress in other projects in the North Sea, Namibia, Morocco and Ireland.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The Department of Energy and Climate Change approved the Columbus field development plan in the North Sea which is expected to achieve first gas production by mid-2015.
In Namibia, Serica received the fast-track on-board processed data from the 4,180 square kilometre 3D seismic survey at blocks in the Luderitz Basin. The company said a preliminary review was 'very encouraging' but will be evaluating its potential further through full-scale processing and interpretation with BP.
Serica has put forward proposals to drill two blocks in Morocco which is expected to kick off in the fourth quarter of 2013.
The group is evaluating the Rockall Basin in Ireland and is reviewing the potential to bring forward drilling of the Muckish prospect. They are in discussions with potentially interested partners to share costs.
Serica is also involved in several UK offshore initiatives which are expected to see progress in 2013.
Tony Craven Walker, Chairman and Interim Chief Executive Officer, said: "Serica has a very busy year ahead of it during which we expect to see a number of the projects, which we have worked hard to bring forward, start to demonstrate their real value.
"In difficult financial markets the company has had to operate with limited cash resources, and that continues to be the case, but the success of our 2012 farm-out programme has resulted in the major benefit of carried interests over large parts of our portfolio, where the potential for high impact exploration success is large.
"Our resources, although limited, are sufficient to meet our current programme and we are confident that we will be able to raise the funding required for our share of the Columbus field development when that is needed."
He added the projects were an opportunity for steady growth and transformational success this year.
RD
-
ScottishPower launches half-price electricity at weekendsNews ScottishPower is offering 50% off electricity at weekends, which could slash hundreds off your bill. We look at who can get it and how to apply
-
Trump calls “tariff” the “most beautiful word in the dictionary”, but investors may disagreeDonald Trump has promised to slap Mexico, Canada and China with new tariffs on day one of his presidency. What does it mean for the economy and investors?
