LONDON, UNITED KINGDOM--(Marketwire - May 11, 2012) - Serica Energy plc (TSX:SQZ)(AIM:SQZ) ("Serica" or the "Company"), the oil and gas exploration and production company, today announces its financial results for the three months ended 31 March 2012. The results and associated Management Discussion and Analysis are included below and copies are available at www.serica-energy.com and www.sedar.com.
               


                  Operational Highlights:
               
               
                  Company now focused on two business units
            North Sea and East Irish Sea
                International exploration across four Atlantic Margin basins
                  Substantial value enhancement across asset portfolio occurred during first quarter
            Columbus development agreed for production to commence late 2014 or early 2015
                Farm-out of Luderitz Basin blocks to BP
                Extensive 3D seismic survey of up to 4,150 sq. kms. offshore Namibia underway
               
               


                  UK Assets and Norwegian North Sea
               
               
                  Columbus field achieves landmark to allow development to proceed:
            Agreement reached with all partners and infrastructure owners to allow export via Lomond Field end 2014
                Serica to drill two development wells and install sub-sea manifolds and pipeline to nearby Lomond platform
                BG to build Bridge Linked Platform to Lomond platform and associated infrastructure
                All cost sharing and tariffing terms agreed
                Terms result in greatly improved CAPEX profile for Serica with bulk of expenditure not until 2014
                Increased Small Field Allowances expected to apply to Columbus
                Debt funding alternatives under review for Columbus development
                Field interests agreed
                NSAI estimate 16.7 mmboe gross 2P reserves in Columbus - Serica share 5.6 mmboe
                  Spaniards discovery appraisal well scheduled for 3Q 2012 (Serica 21%)
           
                  Progress made to drill Doyle and South Otter prospects later this year or 2013
           
                  Bream Field partners in Norway announce field progressing to development
            Serica's economic interest, based on currently forecasted prices at indicated Bream production start, projected at over US$20 million
               
               


                  Non UK Assets
               
               
                 
                    Namibia:
            Completed farm-out with BP for central Luderitz Basin blocks. Substantial value demonstrated
                Serica fully carried on cost of extensive 3D seismic survey and to receive U$5 million in respect of past costs
                Serica interest in Luderitz Basin blocks after farm-out 55%
                3D seismic survey commenced early May - target of 4,150 sq km
                Serica remains Operator for the venture during the seismic acquisition phase
                BP has option to earn a further 37.5% by meeting the costs of drilling and testing a well
                 
                    Morocco:
                   
                      Farm-out process underway in Foum Draa and Sidi Moussa licences prior to drilling the first well offshore
                   
                 
                 
                    Ireland:
                   
                      Farm-out process commencing in Rockall basin licences covering 3 prospects and 12 blocks
                   
                 
                 
                    Indonesia:
                   
                      Average daily Kambuna field production of 16 mmscfd (gross) of gas and 1,000 bbl/day (gross) of condensate during first quarter
               
                      Average prices realised for gas and condensate during the period were US$6.4 per mcf and US$125.0 respectively
               
                      Compression facilities installed in February to arrest natural forecast production decline
                   
                 
               
               


                  Financial Highlights:
               
               
                  First quarter revenues of US$4.0 million
           
                  Loss before tax from continuing operations of US$1.1 million
           
                  Current cash and restricted cash position of US$18.7 million (10 May)
           
                  US$5 million due from BP following Namibia farm-out
           
                  No debt drawn on existing US$50 million facility
           
                  Current cash resources and Kambuna production revenue more than sufficient to meet current exploration commitments
           
                  Bulk of Columbus capital expenditures lies in 2014. Discussions in hand with debt providers.
               
               


                  Outlook:
               
               
                  Columbus project sanction anticipated mid 2012. Production target end 2014
           
                  Kambuna field expected to produce at 20 mmscfd (gross) of gas with associated condensate until 4Q 2012
           
                  Spaniards appraisal well scheduled to drill in 3Q2012
           
                  Morocco farm-out process to close 2Q2012. Second licence phase commences 3Q2012
           
                  3D seismic survey results offshore Namibia expected end 3Q2012
           
                  Plans for drilling Muckish to be brought forward
           
                  Doyle to be drilled after 27th Licensing Round. Otter awaits farm-in.
           
                  Continuing strategy of de-risking portfolio through on-going farm-outs
               
               


                  Tony Craven Walker, Chairman and Interim CEO of Serica commented:
               


                 
                    "Serica has taken major steps forward to demonstrate the value of its assets in the first quarter. We have an exciting and growing portfolio, concentrating on emerging regions which we believe hold great promise.
                 
               
               


                 
                    In the UK we are pleased to have completed negotiations on Columbus, which enable project sanction to be gained. Whilst in Namibia we have seen the potential, that we believe is inherent across our acreage, being substantiated by the value that BP has attributed to our Luderitz basin blocks.
                 
               
               


                 
                    We have an exceptional farm-out track record and currently have processes running across our Atlantic Margin acreage; an area of increasing interest to the oil industry due to the very large structures and highly competitive fiscal terms in these largely unexplored areas. We believe that these farm-out processes will allow us, not only to accelerate the work programmes in these high-impact areas, but also demonstrate the considerable value of the assets.
                 
               
               


                 
                    The remainder of 2012 promises to be an exciting time for the Company with much opportunity as we continue to progress the programmes across our portfolio seeking the most efficient ways of crystallising value."