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Serica Energy: completion of acquisition of BP's interests in Bruce, Keith and Rhum fields

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Oilfield Technology,

Serica Energy plc has announced the completion of the acquisition of interests in the Bruce, Keith and Rhum fields and associated infrastructure in the UK North Sea from BP (‘BKR Acquisition’) by Serica Energy (UK) Limited (‘Serica UK’) and the re-admission of its Ordinary Shares to trading on AIM at 08:00, 30 November 2018.

Completion of the subsequent acquisitions of interests in Bruce and Keith and associated infrastructure from Total E&P UK Limited (‘Total E&P UK’), BHP Billiton Petroleum Great Britain Limited (‘BHP’) and Marubeni Oil & Gas (UK) Limited (‘Marubeni’) (the ‘BK Transactions’) are conditional on the completion of the BKR Acquisition and are expected to occur imminently. Serica will make a separate announcement later today in relation to the BK Transactions.

Following completion of the BKR Acquisition and the BK Transactions (together ‘the Acquisitions’), Serica UK will be the operator of the Bruce, Keith and Rhum fields and hold a 98% interest in the Bruce field, a 100% interest in the Keith field, and 50% interest in the Rhum field.

As the BKR Acquisition constitutes a reverse takeover under the AIM rules, admission of the Ordinary Shares has been cancelled on completion and the Ordinary Shares have been readmitted to trading on AIM as of 30 November.

Under the net cash-flow sharing arrangements with BP, Total E&P UK and BHP, Serica is due to receive a 40% share of the net cash flow, adjusted for notional tax of 40%, for the period from the effective date of 1 January 2018 to completion on 30 November 2018. Additionally, Serica is due to receive 100% of the net cash flow (also on a notional post-tax basis) from Marubeni for the same period. This amounts to approximately US$50 million before payment by Serica of initial consideration of approximately US$22 million.

Mitch Flegg, Chief Executive of Serica Energy, said: “On completion of these transactions we assume operatorship of the Bruce, Keith and Rhum fields and we fully intend to use our agility and experience to significantly enhance the productivity and efficiency of their respective operations.

We are warmly welcoming the 111 colleagues who are joining us from BP. We have spent a large part of the last year putting in place a detailed transition programme, of which the health, safety, welfare and future of our staff are the number one priority. We will highly value the knowledge and expertise of the transferring staff and our other new recruits and believe that our strategic vision and plans will provide an exciting operating environment in which to excel.”

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