Serica Cuts Guidance on UK Setback
Serica Energy is cutting output guidance for the year following difficulties with wax build-up in pipelines from the Chevron-operated UK Erskine field, where production was suspended July 31, when the Forties Pipeline System also went on maintenance.
Production was scheduled to restart late August but the operator of the Lomond platform (Anglo-Dutch major Shell, 100%) said that it will take another two weeks in order to allow monitoring and control of methanol and xylene components used for the wax treatment prior to resumption of exports to the Forties Pipeline System. Erskine and Lomond are both UK North Sea gas and condensate fields.
On completion of this process, Erskine wells will be flowed at maximum rates to clear the treated wax from the line. If the line is sufficiently clear, a pigging programme will then be implemented to maintain the pipeline going forward although it is possible that further chemical treatment may be required before pigging can start. Serica, which has 18% of Erskine, is amending its full year production guidance to between 2,200boe/d and 2,400boe/d to provide for the extended period of facilities maintenance.
CEO Tony Craven Walker, said: "Although the pipeline de-waxing procedures have taken longer than planned by the Lomond operator and Erskine production will resume later than we were expecting, the underlying field capability remains strong and we expect production to pick up as soon as the current restrictions are resolved. On the wider front, Serica continues to make good progress on all of its plans and Erskine's production since acquisition has provided us with a healthy cash balance. We are advancing our objectives to expand the company's resources and add to our production base in parallel with moving our Columbus plans forward. We expect to release our results for the first half of the year towards the end of September and will provide a full operational update at that time."
Shell acquired 32% of Erskine and all of Lomond when it bought BG; it has since agreed their sale to Chrysaor with other formerly BG assets in a deal expected to complete later this year.
William Powell