Serica Energy plc (AIM: SQZ), a British independent upstream oil and gas company with operations centred on the UK North Sea and over 80% gas production, is pleased to announce the commencement of production from the Rhum R3 well.
First production from the well was achieved on 23 August and since then work has continued to optimise production rates from the Bruce, Keith and Rhum fields.
In the last seven days, gross Rhum production has averaged over 190mmcsf/d of gas and 1,400bbl/d of condensate. This equates to an average gross production in excess of 34,000boe/d for the Rhum field. This compares to a maximum rate of 26,000boe/d immediately prior to the commencement of R3 production. Further work will continue in the coming weeks to optimise and stabilise production and if necessary, we will update our production guidance at the time of the publication of our half year results.
Serica has a 50% working interest in the Rhum field.
The successful recompletion of R3 has increased the Rhum production capacity utilising the existing facilities located on the Bruce platform. This is in line with Serica’s stated objective of reducing the carbon intensity (i.e. CO2 per barrel of oil equivalent) of its production operations.
Mitch Flegg, Chief Executive of Serica Energy, commented:
“I would like to congratulate everyone in the Company for the incredible achievements required to overcome the technical challenges involved in establishing first production from this well some 16 years after it was originally drilled.
This is a significant result for Serica and the addition of a third prolific Rhum well is excellent news. Despite the challenges we faced, the additional production and accelerated cash flows will lead to a rapid payback on the capital invested, particularly as we are immediately benefitting from the current high gas prices. Not only will this well enable enhanced production rates from the field, but it will also provide redundancy to help maintain future production.
The successful R3 project is a demonstration of Serica’s ongoing strategy of investment in capital growth projects designed to boost our production levels whilst continuing to reduce our carbon intensity. The next project will be Columbus where we expect first production in Q4 this year.”
