Serica Energy and EnQuest are in discussions about a possible transaction to combine the two companies.
According to a company statement, the board of Serica believes that a combined company will have greater scale and diversification, as well as unlocking synergies and providing a stronger platform for further growth.
Although discussions are ongoing, the transaction will likely be structured as an all share offer by EnQuest for Serica by way of a reverse takeover under the UK Listing Rules.
This would involve a return of capital to existing Serica shareholders conditional upon completion of the transaction, and that Serica shareholders would hold a majority of the shares in the enlarged company with shares listed on the equity shares (commercial companies) (ESCC) of the London Stock Exchange.
The Serica Energy statement added that there is currently no certainty either that an offer will be made, nor as to the terms on which such offer will be made.
EnQuest will need to make a firm intention of an offer for Serica or that it does not intend to make such an offer by 4 April 2025, though this deadline can be extended.
Last month, EnQuest chief executive Amjad Bseisu said it is progressing several UK transaction processes.
Serica Energy boss Chris Cox has previously laid out plans to explore merger and acquisition (M&A) deals in the North Sea, as the region’s fiscal regime “can’t really get any worse than it is right now.”
Its full-year results for 2024 said that the company averaged production of 40,736 boe per day.
Serica is one of the UK’s top ten oil and gas producers, with its assets including around 34,600 boe per day.
Among Serica’s assets include the Bruce, Keith and Rhum fields, and fields in the Triton area. It is also a stakeholder in the Buchan Horst venture.
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