Serica Energy plc said it signed a sale and purchase agreement to acquire all of the issued share capital of Prax Upstream Limited from Prax Exploration & Production Plc.
Prax Upstream owns and is the operator of the Lancaster field west of the Shetland Islands in the United Kingdom’s (UK) North Sea, Serica said in a news release.
Prax Upstream is also party to separate executed sale and purchase agreements (SPAs) with TotalEnergies SE and ONE-Dyas for the purchase of certain assets, according to the release.
The acquisition, including completion of the existing SPAs, consists of a 40 percent operated interest in the Greater Laggan Area (GLA), a 10 percent interest in the Catcher Field, a 5.21 percent interest in the Golden Eagle Area Development, and a 100 percent interest in the Lancaster field.
The total aggregate upfront consideration for the transaction is $25.6 million. Completion of the acquisition is expected in the fourth quarter, and for the existing SPAs in the first quarter of 2026, Serica said.
The acquisition will add 11 million barrels of oil equivalent (mmboe) of 2P reserves. The assets associated with the existing SPAs produced 7,900 barrels of oil equivalent per day (boepd) in the first half of 2025, while the Lancaster field produced 5,900 boepd, according to the release.
The assets will provide a new operated hub for Serica in the West of Shetland basin with multiple sources of organic growth potential, including an infill well on the Tormore field, the Glendronach development, four exploration licenses, and third-party throughput opportunities in the Shetland Gas Plant (SGP), the company said.
The SGP was commissioned in 2016 and is the newest onshore gas processing facility in the U.K. The plant and its associated infrastructure serve as the key gathering system for gas coming from the highly prospective West of Shetland basin.
Serica said it expects that the facility will facilitate the exploitation of infrastructure-led development and exploration opportunities in the area, including new sources of third-party throughput that offer the potential to extend the productive life of the SGP. The company cited the impending start-up of production from the Shell-operated Victory field in the fourth quarter as a “prime example” of such an opportunity.
The GLA assets, located northwest of Shetland, consist of eight wells from four fields connected as subsea tiebacks to, and operated from, the SGP. Production was measured at 5,000 boepd net to TotalEnergies in the first half, 90 percent of which was gas. GLA gas is evacuated from the SGP through the Shetland Islands Regional Gas Export System pipeline into the Frigg UK Association pipeline to the St Fergus terminal, according to the release.
Serica CEO Chris Cox said, “This transaction represents a further step in the delivery of our growth strategy – it diversifies our portfolio, increases our reserves and resources, and enhances near-term cashflows at an attractive valuation. 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 [mergers-and-acquisition] opportunities”.
“The transaction illustrates Serica’s ability to move quickly, utilizing our strong balance sheet and skill sets to make an acquisition with strategic potential on attractive terms,” Cox added.
To contact the author, email rocky.teodoro@rigzone.com
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