Serica updates Indonesian operations

London Stock Exchange-listed oil gas firm Serica Energy plc provided on Tuesday first quarter update on its Indonesian operations

Biliton PSC, offshore Java Sea (Serica 45 percent, operator)

Serica recently announced the farm-out of a percentage of the Company's interest in the Biliton PSC. In line with its strategy to spread exploration risk and manage costs, Serica has signed an agreement with a subsidiary of the privately owned oil exploration and production company, Nations Petroleum Company Ltd., to farm-out a 45% interest in the Biliton PSC subject to required regulatory approval.

Nations Petroleum will bear the majority of the costs of the two well drilling programme, scheduled to commence in Q3 2007.

Serica will remain the operator and will retain a 45% interest in the Biliton PSC. A number of potentially significant prospects have been identified within the PSC, which is located offshore in a virtually unexplored basin in the central Java Sea, and the Seadrill-5 drilling rig is contracted to drill the two exploration wells back-to-back.

Glagah-Kambuna TAC, offshore North Sumatra (Serica 65 percent operator)

Development of the Kambuna field offshore north west Sumatra is proceeding and the Seadrill-5 drilling rig will return to drill the development wells in Q4 2007 following the installation of the well head support structure.

First production is expected in late 2008. As reported with the full year results, slippage in the 3D seismic programme together with delays in the receipt of approvals from Pertamina have resulted in this later start-up and an application is being lodged with Pertamina for a revision to the field plan of development.

Asahan Offshore PSC, offshore North Sumatra (Serica 55 percent, operator)

In the neighbouring Asahan Offshore PSC, Serica has been in discussions with the Indonesian authorities regarding the continuation of exploration activity in the area following the expiry of the initial 10 year exploration period of the PSC in December 2006.

To date, in view of the lack of agreement on the commerciality of the PSC, it has not proved feasible to extend the contract and, accordingly, it is likely that the PSC will be formally terminated.

The company has therefore deferred its plans to drill two exploration wells in the PSC this year but has submitted alternative proposals to enable it and its partners to continue exploration work in the area under revised terms.

Kutai PSC, Kutei Basin (52.5 percent, operator)

Geological and geophysical work has commenced on the large Kutai Block awarded to Serica late in 2006 and which lies both offshore and onshore East Kalimantan, adjacent to major fields. (end)