UK-based oil and gas company Serica Energy has entered into an agreement to purchase 100% of the issued share capital of Prax Upstream from Prax Exploration & Production.
Prax Upstream is the operator and sole owner of the Lancaster field and is party to separate executed sale and purchase agreements (SPAs) with TotalEnergies and ONE-Dyas for the acquisition of some assets.
Combined with completion of the existing SPAs with TotalEnergies and ONE-Dyas, the latest transaction provides Serica with a 40% operated interest in the Greater Laggan Area (GLA), a 10% interest in the Catcher field, a 5.21% interest in the Golden Eagle Area Development and a 100% interest in the Lancaster field.
The aggregate upfront consideration for the acquisitions is $25.6m (£19.02m).
The corporate acquisition of Prax Upstream is for a consideration of $18.9m.
Serica CEO Chris Cox said: “The addition of GLA brings Serica a new production hub, with operatorship of the Shetland Gas Plant.
“There is an immediate boost to production and reserves, plus the scope to create significant value for shareholders through multiple subsurface, commercial and further M&A [mergers and acquisitions] opportunities.”
Completion of the purchase is expected in Q4 of this year (Q4 2025), with completion of the existing SPAs anticipated in Q1 2026.
Serica says that, in total, the transactions bring an additional 11 million barrels of oil equivalent (mboe) of proved and probable (2P) reserves, implying an acquisition price of $2.3 per barrel of oil equivalent (boe).
The combined portfolio will broaden Serica’s production mix. Production for the first half of 2025 (H1 2025) associated with the existing SPAs is reported at 7,900 barrels of oil equivalent per day (boepd), while Lancaster is reported at 5,900boepd. The Lancaster field production is expected to cease in H2 2026.
The acquisition will provide Serica with a new operated hub in the West of Shetland basin, offering numerous opportunities for organic growth. These include an infill well on the Tormore field, development of the Glendronach field, four exploration licences and third-party throughput possibilities at the Shetland Gas Plant.
Once the transactions are completed, Serica will make an upfront payment totalling $25.6m. Additionally, the company will receive payments amounting to an estimated $100m. These payments account for interim post-tax cash flows between the economic dates of each transaction and the anticipated completion dates.
Besides the completion payments, Serica expects an incremental free cash flow of around $50m from the acquired assets next year.
[SRC] https://finance.yahoo.com/news/serica-buy-100-issued-share-091236190.html
