Serica Energy (LON: SQZ) has announced it will acquire a 30% non-operated interest in the North Sea’s Greater Buchan Area development from Jersey Oil and Gas (JOG).Serica said completion is subject to regulatory, partner and interested party approvals and is expected to occur in early 2024. After completion, partners in the GBA will include Serica Energy UK (30%), NEO Energy (50% and operator) and JOG (20%).
JOG said the deal includes a full carry on the capital expenditure required to bring the Buchan field into production and several milestone cash payments.“Upon completion of the Serica Farm-out, the combined cash payments received from the two farm-outs will be over $18 million, with a further $20 million due to be paid to JOG at Buchan Field Development Plan (“FDP”) approval,” JOG said.
Greater Buchan Area
The Greater Buchan Area (GBA) covers several oil and gas accumulations around 150km north east of Aberdeen in the outer Moray Firth. The GBA is covered by the P2498 and P2170 licences. Of the deposits in the GBA, the largest is the Buchan field which produced for over thirty years before it ceased production in 2017 due to the end of the useable life of the floating production facility.
Plans submitted to the North Sea Transition Authority regulator involve the re-development of Buchan based on a new production hub utilising a new floating production, storage and offloading vessel (FPSO). The FPSO is currently operating on the UK Western Isles fields and is planned to come-off station in the second half of 2024.
NEO Energy acquired the FPSO on behalf of the Buchan joint venture firms last week on November 17.NEO estimates total capital expenditure forecast for the Buchan redevelopment to be approximately £850-950 million.
Phased development for Buchan field
Serica said plans for a “phased development” involve the re-development of the Buchan field in the first phase and the possible development of the J2 and Verbier discoveries in the second phase.The company estimates mid-case contingent resources from the Buchan field alone to be in the region of 70 million barrels of oil equivalent, with peak production rates of approximately 35,000 barrels of oil equivalent per day.Reserves of that size make it the third largest pre-development field in the UK continental shelf. Serica said other discoveries and prospects in close proximity could provide additional tie-back opportunities to the FPSO.