Serica Energy and EnQuest Discuss Potential Merger in the Oil and Gas Industry

Two prominent UK-based oil and gas companies, Serica Energy and EnQuest, have initiated talks regarding a potential business combination that could result in the creation of a larger entity with a total market capitalization of nearly $1 billion.

Serica Energy, with a market capitalization of over $642.53 million, has confirmed ongoing discussions with EnQuest, valued at more than $286.74 million, regarding a possible consolidation move. If successful, this merger could establish a combined company with a market capitalization of approximately $929.27 million.

The boards of both companies see significant benefits in this potential merger, such as increasing scale and diversification, unlocking synergies, and providing a stronger platform for future growth. The proposed structure involves an all-share offer by EnQuest through a reverse takeover of Serica under the UK Listing Rules.

While the discussions are still in progress, Serica anticipates a return of capital to its existing shareholders upon completion of the merger. Shareholders are expected to hold a majority stake in the enlarged company, with shares listed on the ESCC market of the London Stock Exchange.

EnQuest has until April 4, 2025, to disclose a firm intention to make an offer for Serica or announce its decision not to proceed with the offer. Any potential transaction terms will be adjusted to reflect the value of dividends or other distributions to shareholders by Serica.

EnQuest’s operations focus on maturing assets in the UK and Malaysia, offering organic growth opportunities. Its UK assets include Magnus, Kraken, Golden Eagle, and others, while Malaysian operations encompass the PM8 and Seligi fields. EnQuest recently acquired Harbour Energy’s business in Vietnam, expanding its Southeast Asia portfolio.

On the other hand, Serica Energy operates multiple fields in the UK North Sea, aiming for stable production from hubs like Bruce and FPSO Triton. It also partners in projects like Erskine and Buchan Horst, awaiting regulatory clarity in the UK oil and gas industry.