Serica Energy falls on operations update

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'.

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.

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

Recommended

Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021
What the best-performing investment trusts of the past 20 years can teach us
Investment trusts

What the best-performing investment trusts of the past 20 years can teach us

Forty-two trusts have risen more than tenfold over the last two decades. What made the winners stand out? And how can we identify future outperformers…
12 Oct 2021
Activision Blizzard: a cheap play on videogames
Share tips

Activision Blizzard: a cheap play on videogames

Videogame maker Activision Blizzard has been in the news for the wrong reasons lately. But it has a bright future, says Stephen Connolly.
11 Oct 2021

Most Popular

Inflation is still one of the biggest threats to your personal finances
Investment strategy

Inflation is still one of the biggest threats to your personal finances

Central bankers and economists insist inflation will be gone by next year. We're not so sure, says Merryn Somerset Webb. So if you haven’t started to …
1 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021