Serica in $30m Irish drilling plan

UK-based Serica Energy is hoping to begin a $30 million exploration drilling programme at its gas prospects in the Slyne Basin off the west coast of Ireland.

"We hope to drill it this year," Serica's chief executive Paul Ellis told The Irish Times. "It's a question of getting rigs and sorting out a few other technical issues. [Because of the difficult Atlantic weather] we can only drill there in the summer."

Serica secured rights to the Slyne blocks in the last licensing round in 2006. It is situated about 50km from the Corrib field, which has been the subject of much controversy between Shell and locals in Co Mayo.

Serica is considering drilling two wells over a 60-day period during the summer.

Mr Ellis said the company would probably bring in rigs from the North Sea. With oil hovering around the $100 a barrel mark, rigs are in high demand among exploration companies, pushing up their cost.

As a result, Mr Ellis said the company would probably incur costs of about $500,000 a day for its Irish drilling programme.

"We are taking a risk, which is what you do as exploration companies," he said. "These are wildcat exploration wells but they are potentially large, which is why we like them."

Mr Ellis said 3D seismic data suggests that its gas prospect could be as large as the Corrib field, which has reserves of about a trillion cubic feet of gas.

Serica has indicated that it could seek a "farm-in" partner for the project.

Serica was formed in 2000. It listed in Canada four years later and on the Alternative Investment Market in London in 2005.

It recently raised $52 million to fund exploration activities and secured a $100 million debt facility from JP Morgan and Bank of Scotland. It is also considering drilling in Vietnam.

Serica is due to begin production at its Kambuna gas field in offshore Indonesia in late 2008. This would be its first production of oil or gas. It has a 65 per cent interest in the Kambuna field and has signed a deal to sell the majority of gas there to the Indonesian state electricity company.