UK-based oil firm Serica Energy has completed the acquisition of 30% non-operated interest in two licenses in the Greater Buchan Area from Jersey Oil & Gas.
The acquisition of interests in the P2498 and P2170 licenses, which together form the Greater Buchan Area, provide Serica Energy with the option of participating in the re-development of the Buchan field (formally re-named Buchan Horst) and other potential projects in the area, such as the development of the J2 and Verbier discoveries.
Currently, the partners in the Greater Buchan Area are Serica Energy (UK) with 30% stake, NEO Energy as operator holding 50% interest, and Jersey Oil & Gas which maintained 20% stake after the sale.
On completion, Serica made a cash payment to Jersey Oil & Gas in the amount of $7.5 million, being $6.8 million adjusted to reflect an economic date of April 1, 2023 as previously reported.
The remainder of the potential consideration is in the form of a Buchan development cost carry and contingent amounts linked to certain future events.
"We are pleased to have completed this transaction which creates the possibility of adding a third production hub to Serica's North Sea portfolio.
“As a potential domestic source of oil and gas with a low level of production emissions, a provider of quality jobs for UK workers and a generator of much needed future tax revenues, Buchan is the sort of project the UK needs as part of the energy transition,” said Mitch Flegg, Chief Executive of Serica Energy.
The Greater Buchan Area encompasses several oil and gas accumulations some 150 km north-east of Aberdeen, in the Outer Moray Firth. The largest of these accumulations is the Buchan field which produced for over thirty years, ceasing production in 2017 owing to the end of the usable life of the floating production facility.
The Concept Select Report submitted to the NSTA for the re-development of Buchan is based on a new production hub located at the Buchan field utilizing the floating production, storage, and offloading (FPSO) vessel currently operating on the UK Western Isles fields and planned to come off-station in the second half of 2024.
The acquisition of the FPSO by NEO on behalf of the participants in the Buchan joint venture was announced on November 17, 2023.