Operations in United Kingdom

Block 54/1b - Oak Discovery

Serica 50% (operator), Centrica 50%

Block 54/1b covers an area of 106 square kilometres in the Southern Gas Basin. Serica is operator of the block and holds a 50% interest, having farmed out half of its original 100% interest to Centrica.

Serica commenced drilling well 54/1b-6 in October 2006 and the well reached its final depth of 8,318 feet subsea in November. A gas-bearing Leman sandstone reservoir with a gross gas column of 113 feet was encountered and a production test was carried out on an interval of 80 feet. A stabilised gas flow rate of approximately 10 million scfd was recorded on a 44/64 inch choke. However, subsequent laboratory analysis of gas samples taken during the test indicates that a significant proportion of the gas is made up of inert components and the Company now feels that it is unlikely that the Oak discovery can be produced commercially until a suitable gas processing and transmission system is available in the area.

The Oak discovery lies on the median line between the UK and the Netherlands and other undeveloped fields with a high inert gas content have been discovered near to Oak in both the UK and Dutch Sectors. Operators in Holland are currently investigating the feasibility of joint development of such fields with export to the Dutch gas market.