Finder Energy Secures £1 Million Upfront in 40% P2530 Farmout Deal with Serica
Finder Energy has signed a farmout agreement assigning 40% of its North Sea P2530 licence to Serica Energy, retaining operatorship and a 20% stake. This move aims to accelerate appraisal and development of the Wagtail oil discovery through strategic partnership and regulatory approvals.
- Farmout agreement assigns 40% interest in P2530 licence to Serica Energy
- Finder retains 20% interest and operatorship of the licence
- Transaction includes upfront payment, cost carry, and conditional milestone payment
- North Sea Transition Authority approval and licence extensions are pending
- Partnership facilitates integration with Triton FPSO infrastructure for Wagtail development
Strategic Farmout Agreement Signed
Finder Energy Holdings Limited (ASX – FDR) has taken a significant step in advancing its North Sea oil interests by signing a farmout agreement with Serica Energy (UK) Limited. Under the terms, Serica will acquire a 40% interest in the Seaward Production Licence P2530, while Finder retains a 20% stake and continues as operator. This deal is designed to leverage Serica’s expertise and existing infrastructure to progress the development of the Wagtail oil discovery.
Financial and Operational Considerations
The agreement includes a £500,000 (approximately A$1 million) payment to Finder upon completion, a carry of Finder’s share of joint venture costs through the current Phase B of the licence, and an additional £936,000 (around A$1.9 million) contingent on the licence moving into Phase C. These financial arrangements provide Finder with immediate capital and reduce near-term expenditure risks, while aligning incentives for future development milestones.
Regulatory Approvals and Licence Extensions
Completion of the transaction is subject to several conditions, notably the approval of the North Sea Transition Authority (NSTA) for the licence transfer and an extension of the licence term. The NSTA has indicated it will grant a nine-month extension to Phase B, allowing further engineering and feasibility studies to confirm the viability of developing Wagtail via a tie-back to the nearby Triton Floating Production Storage and Offloading (FPSO) vessel. A subsequent 12-month extension to Phase C is also anticipated, providing a timeline to drill an appraisal well or decide on licence discontinuation.
Wagtail Discovery and Infrastructure Synergies
The Wagtail discovery, estimated to hold 19 million barrels of gross 2C contingent resources, represents a promising asset within the P2530 licence. Finder’s recent seismic reprocessing and geotechnical studies have highlighted improved reservoir quality towards the east of the discovery well. With Serica already a partner in the Triton FPSO and the Pict field nearby, their entry into P2530 creates a cohesive joint venture group well-positioned to optimise infrastructure and reduce development costs.
Outlook and Next Steps
Finder is actively working to satisfy all conditions precedent with an expectation to complete the transaction before year-end. The extended Phase B period will be critical for completing development engineering and confirming the commercial potential of Wagtail. Should these studies prove positive, the joint venture will move into Phase C, committing to appraisal drilling. This partnership and phased approach reflect a prudent strategy to de-risk development while leveraging complementary capabilities.
Bottom Line?
As Finder and Serica align to unlock Wagtail’s potential, the coming months will be pivotal in shaping the licence’s future and North Sea development dynamics.
Questions in the middle?
- Will the North Sea Transition Authority approve the licence transfer and extensions without delay?
- How will Serica’s involvement influence the timing and scale of Wagtail’s appraisal and development?
- What are the potential commercial outcomes if Phase B studies do not support moving into Phase C?
