Serica Energy aims to acquire BP’s 32% stake in Culzean, UK’s largest gas field, boosting production and cash flow.
UK-based upstream oil and gas company Serica Energy is making a major move to expand its North Sea operations by entering into an agreement to acquire BP’s entire stake in one of the UK’s most significant natural gas assets. The acquisition involves a 32% non-operated interest in the P111 license, home to the Culzean gas condensate field, along with the adjacent P2544 exploration license, both situated in the UK Central North Sea. The Culzean field, operated by TotalEnergies, is currently recognized as the largest single producing gas field on the UK Continental Shelf (UKCS).
In announcing its intent to purchase BP’s interests in these licenses, Serica highlighted that the completion of the deal is subject to certain conditions, including the waiver of applicable pre-emption rights. The firm is being advised financially on the transaction by Lambert Energy Advisory.
Under the joint operating agreement governing the Culzean field, BP’s partners—TotalEnergies (49.99%) and NEO NEXT (18.01%)—retain the right to acquire BP’s stake on the same terms offered to Serica. This introduces a 30-day pre-emption period during which these partners can decide whether to exercise their option. Discovered in 2008 and brought online in 2019, the Culzean field has rapidly become the largest gas producer on the UKCS. In the first half of 2025, BP’s net production from the field averaged approximately 25,500 barrels of oil equivalent per day (boepd) with a remarkable operating efficiency of 98%.
The field’s remaining 2P reserves are estimated at around 33 million barrels of oil equivalent (mmboe), with additional upside potential from future infill drilling and licensed exploration opportunities. Notably, the field is also regarded as one of the lowest carbon-emitting assets in the UK North Sea, with emissions significantly below the sector average of 20 kg CO2/boe.
The acquisition has an economic date of September 1, 2025, and entails an upfront cash payment of $232 million, subject to standard working capital adjustments. This is partially offset by interim post-tax cash flows between the economic date and the transaction’s completion, which is anticipated around year-end 2025. The deal also includes provisions for two additional contingent payments based on exploration results in the P2544 license and any changes to the UK ring-fence fiscal regime.
Serica expects to fund the transaction using interim cash flows from the Culzean interest alongside existing financial resources, including cash reserves and undrawn amounts under its $525 million reserve-based lending facility. Additionally, the company is exploring the option of a new acquisition financing facility, which could later be refinanced via expanded debt capacity, reflecting the enhanced, cash-generative portfolio post-acquisition, including both the Prax and Culzean assets.
Commenting on the transaction, Serica CEO Chris Cox said: “If this acquisition is completed, it will mark a significant milestone for Serica, adding substantial production and cash flow from the UK’s largest producing gas field. Culzean is a world-class asset, offering gas from a modern platform with high uptime and exceptionally low emissions.”
