Serica Energy has completed the acquisition of a major portfolio of Southern North Sea assets from Spirit Energy in a deal which will add around 10,000 barrels of oil equivalent per day to its production.
The North Sea operator has made a net payment of £33 million to Spirit Energy, down from upfront consideration of £57 million after accounting for post-tax cashflows generated by the assets since the deal’s effective economic date of January 1, 2025.
Serica said the acquired portfolio was now expected to generate more than $200 million (£150 million) of free cash flow by the end of 2028, more than double the forecast when the transaction was announced in December last year.
The package includes a 15% interest in Cygnus, one of the largest producing gas fields on the UK Continental Shelf, as well as a 25% stake in the Clipper South gas field and operated positions across the Greater Markham Area.
The assets contain 18.7 million barrels of oil equivalent of proven and probable reserves, alongside 3.4 million barrels of contingent resources, and will form a new Southern North Sea Hub within Serica’s portfolio.
Spirit Energy, which is majority owned by Centrica, will retain decommissioning liabilities on the operated assets, representing more than 75% of the estimated total decommissioning liability.
The acquired portfolio will be particularly familiar to Serica chief executive Chris Cox, who previously served as chief executive of Spirit Energy before joining Serica.
He said: “We are delighted to complete this acquisition of high-quality assets which materially boost our production and reserves while increasing our commodity weighting towards gas.
"This is an excellent transaction for Serica - it is immediately cash generative, strengthens our position in the UK gas market and adds a significant new Southern North Sea hub to our portfolio.
"With forecast free cash flow from the acquired assets expected to exceed $200 million by the end of 2028, the value case has strengthened materially since announcement.
"We are excited to welcome our new colleagues in Hoofddorp in the Netherlands and Aberdeen to Serica and to move quickly into integration, as we continue to build a stronger, resilient, and cash-generative North Sea business.”
Centrica said the transaction involved the transfer of £44 million of decommissioning liabilities alongside the £33 million final consideration.
Following the sale, the Morecambe Hub will become Spirit Energy’s principal producing asset, with retained reserves of nine million barrels of oil equivalent.