In its second major North Sea deal in 10 months, Serica Energy (SQZ) is to acquire Total’s 42.25 and 25 per cent interests in the Bruce and Keith fields. Structured on a similar earn-out basis to Serica’s takeover of BP’s stake in Bruce, Keith and the Rhum gas field, the transaction is set to finalise on completion of the BP acquisition.
When that will be, neither BP nor Serica can say. Rhum is 50 per cent-owned by a subsidiary of the Iranian National Oil Company, which is about to be hit with US sanctions following America’s withdrawal from the 2015 nuclear deal. Both BP and Serica are in “advanced stage discussions” with the UK and US governments to extend a sanctions waiver that expires next month.
If those talks prove fruitful, Serica should be able to move quickly. Due diligence on Total’s holdings – the addition of which will take Serica’s operated interest in Bruce and Keith to 78.25 and 59.83 per cent, respectively – has been completed by proxy. Like the BP deal, the transaction will be backdated to 1 January 2018, and Total will be entitled to pre-tax net cash flow of 60 per cent this year, 50 per cent in 2019, and 40 per cent in 2020.
