Serica Energy agrees to acquire Prax Upstream’s UK offshore interests
Serica Energy is set to expand its UK E&P operations to the West of Shetland region.
The company has signed an agreement to acquire Prax Upstream from Prax Exploration & Production (in Administration). Prax Upstream operates the basement Lancaster oil field West of Shetland, previously developed by Hurricane Energy on an early production basis, and had also executed sale and purchase agreements (SPAs) with TotalEnergies and ONE-Dyas for certain producing fields.
Assuming completion of the acquisition later this year and the SPAs in early 2026, Serica would gain:
- A 40% operated position in the Greater Laggan Area (GLA) gas project and facilities West of Shetland;
- 100% of Lancaster;
- A 10% stake in the Catcher Field (operated by Harbour Energy); and
- 5.21% in the CNOOC-led Golden Eagle Area Development (GEAD).
Serica estimates the overall upfront price of the deal at $25.6 million. The company expects to add production of 7,900 boe/d (first-half 2025 average) associated with the SPAs and 5,900 boe/d from Lancaster, which it expects to cease production in the second half of 2026. The Bluewater-supplied FPSO Aoka Mizu has been provisionally lined up for the Sea Lion development offshore the Falklands.
But the main gain for Serica would be operatorship of the GLA project, which provides multiple opportunities for production growth.
The GLA assets are the:
- Producing Laggan, Tormore, Glenlivet and Edradour fields;
- The Glendronach discovery;
- Four nearby offshore infrastructure-led exploration licenses, with prospective net resources of more than 400 MMboe; and
- The onshore Shetland Gas Plant, which receives production exported through the GLA’s subsea pipeline system.
The existing partnership has been working on plans for a new infill well on Tormore and the development of Glendronach. And the Shetland Gas Plant can accommodate throughput from other third-party gas developments.
One of these is the newly onstream, Shell-operated Victory gas field, which is connected to the GLA pipeline system that exports production to the Shetland Gas Plant.
As for decommissioning liabilities associated with the transaction, most of the near-term costs concern P&A of two wells at Lancaster (about $60 million). Decommissioning of Catcher and GEAD will likely take place toward the end of this decade, with an estimated net cost of about $90 million.