Serica Energy plc announces that it has signed an agreement to acquire 100% of the shares in Parkmead (E&P) Limited (‘PUK’) from Parkmead Group Plc (‘Parkmead’), which includes a 50% working interest in licence P2400 (Skerryvore) and a 50% working interest in licence P2634 (Fynn Beauly), for an initial consideration of £5 million ($6.4 million1).
An additional deferred consideration of £9 million ($11.5 million1) will be paid in stages over the next three years, as well as contingent payments linked to certain development milestones – payable on receipt by Serica of approval by the North Sea Transition Authority (‘NSTA’) for a field development plan (‘FDP’) relating to Skerryvore or Fynn Beauly. These payments are calculated based on £0.8/bbl of net 2P reserves contained within the respective FDP, subject to a cap of £30 million and £90 million respectively.
The transaction provides optionality regarding future projects, simplifies decision making, and provides strategic flexibility relating to the existing position in Skerryvore through consolidating the interests in the P2400 licence, in which Serica Energy (UK) Limited, a wholly owned subsidiary of Serica, already holds a 20% interest. Following completion of the transaction, Serica will hold 70% and become the operator.
The P2634 licence was awarded in the 33rd Licencing Round in July 2024 to PUK, as operator, and Orcadian Energy, and includes the Fynn Beauly heavy oil discovery. The current licence commitment is limited to technical studies to assess the feasibility of reducing Fynn Beauly oil viscosity using enhanced oil recovery techniques.
PUK has carried forward tax loss balances which as at the transaction economic date of 30 June 2024 amounted to £197 million of ring-fence corporation tax losses, £181 million of supplementary charge tax losses, £1 million of Energy Profits Levy losses and £12 million of activated investment allowances. PUK has no employees.
The transaction is expected to close in the first half of 2025, subject to customary completion adjustments and the carve-out of PUK’s Dutch assets to a Parkmead affiliate and NSTA change of control consent.
