Sqz Ob 12th May

Serica Energy plc – OilBarrel Conference May 12 2009

DISCLAIMER

● The information presented herein is subject to amendment and has not been independently verified. Serica does not represent that the information and opinions contained herein are necessarily adequate or accurate and no liability is accepted for any errors or omissions.

● This presentation contains forward-looking statements which are based upon Serica’s internal projections, expectations or beliefs concerning such matters as the company’s future operational and financial performance

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future operational and financial performance

● Such forward-looking statements are subject to risk and uncertainty which may result in Serica’s actual performance being materially different to that projected

● A full account of such risks was presented in the December 2005 Serica Placing and Admission to AIM document and is also discussed in the Annual Information Form filed with the TSX-V each year

Cover photograph: Kambuna topsides installation on 10th March 2009

KEY INFORMATION

● UK based independent E&P company

● Core areas: Western Europe and South East Asia

● Listed on UK AIM and Canada TSX-Ventures markets (SQZ)

● Shares in issue 176,518,310

● Market capitalisation c. US$160 million (8.05.09)

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● 1.4.09 cash was US$38 million, debt US$45 million, net debt US$7 million

● Net 2P Reserves of 28.5 million boe

● First production in mid 2009 from Kambuna field (Serica 50%)

● Filed Columbus field development plan October 2008 (Serica 50%)

● High impact drilling offshore Ireland at Bandon prospect (Serica 50%)

● High impact exploration planned at Conan (East Irish Sea) (Serica 100%)

● 2009 drilling at Bandon, Conan and Vietnam will be at little cost to Serica

BOARD OF DIRECTORS

● Chairman Tony Craven Walker(BP, Charterhouse, Monument)

● Chief Executive Paul Ellis(BP, Charterhouse, BG, PanCanadian, Emerald)

● Chief Financial Officer Chris Hearne(Intrepid Energy, Lehman Bros, Robert Fleming)

● Chief Operating Officer Peter Sadler

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● Chief Operating Officer Peter Sadler(Fletcher Challenge, Novus, Indago, RAK)

● Non-Executive Director Neil Pike(Citibank)

● Non-Executive Director Ian Vann(BP)

● Non-Executive Director Steven Theede(Conoco, Yukos)

● Non-Executive Director Jonathan Cartwright(Peat Marwick, Transworld, Hanson, Caledonia)

HIGHLIGHTS OF 2008 & 1Q 2009

Operational Highlights

● Proved & Probable Reserves increased by 48% to 28.5 mm boe

● Kambuna wells tested at combined 144 mmscfd and 8,000 bopd

● Columbus Field Development Programme filed

● Farm-outs concluded for Kutai, Chablis, Bandon & Vietnam

● Awarded offshore East Seruway PSC adjacent to Kambuna field

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● Awarded offshore East Seruway PSC adjacent to Kambuna field

● Awarded three UK Offshore Licences in 25th Round 2008

Financial Highlights

● Raised US$49 million net through a placing

● Sold a 15% stake in the Kambuna field in July for US$53 million

● Raised approx. US$70 million through farmouts

● Extended US$100 million Senior Debt Facility to November 2009

AIM SHARE PRICE – LAST 3 MONTHS

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EXPLORATION RISK & GAMBLER’S RUIN

Gambler’s Ruin:

The fact that in any game of chance one will eventually go broke simply through a normal run of bad luck

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An exploration question:

In an area where the statistical chance of exploration success is 10%, how many wells must be drilled to ensure that there is only a 10% risk of total failure?

(Total failure = all wells drilled are dry holes)


Chance of Total Failure (COF) with anExploration Chance of Success of 10%

Wells Drilled COF

Wells Drilled COF

Wells Drilled COF

1 90%

2 81%

3 73%

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3 73%

4 66%

5 59%

6 53%

7 48%



Wells Drilled COF

Wells Drilled COF

Wells Drilled COF

1 90% 9 39%

2 81% 10 35%

3 73% 11 31%

9

3 73% 11 31%

4 66% 12 28%

5 59% 13 25%

6 53% 14 23%

7 48% 15 21%

8 43% 16 19%



Wells Drilled COF

Wells Drilled COF

Wells Drilled COF

1 90% 9 39% 17 17%

2 81% 10 35% 18 15%

3 73% 11 31% 19 14%

10

3 73% 11 31% 19 14%

4 66% 12 28% 20 12%

5 59% 13 25% 21 11%

6 53% 14 23% 22 10%

7 48% 15 21%

8 43% 16 19%


Wells Required for a Chance of Total Failure (COF) of 10%For a range of Chances of Success

Chance of Success Number of Wells

10% 22

11




10% 22

12

20% 11




10% 22

13

20% 11

30% 7




10% 22

14

20% 11

30% 7

40% 5




10% 22

15

20% 11

30% 7

40% 5

50% 4


Ways to succeed in pure exploration

● Increase the Chance of Success

● Drill in areas with proven petroleum systems

● Focus on gas prospects (where a market exists)

● Use a variety of detailed 3D seismic analysis techniques

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● Identify large prospects with moderate risk

● Reduce cost exposure

● Acquire interests with existing seismic (3D if possible)

● Limit commitment wells to a minimum

● Secure promoted farmouts

Don’t fall in love with your own prospects!

ASSET UPDATES

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MAIN PROJECTS 2009 – UK AND IRELAND

Columbus FDP approval

Conan Farm-out

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Bandon Exploration wellChablis Appraisal evaluation

UK 25th Round Awards : 15/21g,

48/16a (part) and 110/2d

MAIN PROJECTS 2009 – SOUTH EAST ASIA

Kutai 2D & 3D Seismic Surveys

Vietnam 06/94 Tuong Vi

Exploration Well Farm-out Agreed

East Seruway

Planning Seismic Survey

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Kambuna Production scheduled

for mid-year

Kutai 2D & 3D Seismic Surveys

Interpretation

SERICA NET RESERVES

2P Reserves (mmboe) Columbus Kambuna Total

On 1st January 2008 0 19.3 19.3

Disposals 0 (4.5) (4.5)

Additions & Revisions 8.9 4.8 13.7

On 31st December 2008 8.9 19.6 28.5

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● Serica 2P reserves increase by 48% over 2007

● Serica holds 50% interests in both fields

● Sale of a 15% interest in Kambuna in 2008 mitigated by increase in field reserves

● Submission of Columbus Field Development Programme in 2008 – 2P reserves now booked

Reserve Growth (mmboe) 2008 2007 2006

(1P) Proved 16 12.1 -

(2P) Proved + Probable 28.5 19.3 16.8

(3P) Proved + Probable + Possible 52.4 29.6 -

SERICA RESERVES GROWTH

Reserves Growth: Gas (bcf)

105.1

17.96.7

38.7

77.6

20

40

60

80

100

120

Reserves Growth: Oil Equivalent (mmboe)

8.8525

30

+35%

+48%

21

0

Dec-07 Kambuna Sale Kambuna Field Size

Revision

Columbus

Reserves

Dec-08

Reserves Growth: Condensate (mmbbl)

8.2

1.50.9

2.4

6.4

0

1

2

3

4

5

6

7

8

9

Dec-07 Kambuna Sale Kambuna Field Size

Revision

Columbus

Reserves

Dec-08

28.5

4.52.0

2.85

19.3

0

5

10

15

20

Dec-07 Kambuna

Sale

Kambuna

Field Size

Revision

Kambuna

Conv. Factor

Revision

Columbus

Reserves

Dec-08

+28%

The conversion factor for converting Kambuna gas reserves to barrels of oil equivalent has been changed from 6,000 cu ft/boe to 4,800 cu ft/boe, more accurately reflecting the high calorific value of the gas, 1240 BTU/cubic feet.

KAMBUNA FIELD UPDATE (Serica 50%)

● Field Proved & Probable ReservesGas 132.8 bcf (2007 119.4 bcf)Oil 11.6 mm bbl (2007 9.9 mm bbl)Total 39.3 mm boe (2007 29.7 mm boe)

● First gas scheduled for mid 2009

● Terms for first 40 mmscfd agreed

● Gas price c. US$6/mcf + 3% p.a.Condensate near Brent price

● PSC terms and gas sales on long term

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● PSC terms and gas sales on long term contracts make Kambuna relatively insensitive to oil price

● Sold 15% stake to Salamander Energy valuing Serica’s retained 50% stake at that time at c. US$170mm

● Net Present Value of Serica’s 50% interest in Kambuna at 31.12.08 at a 10% discount factor is US$160mm at forecast prices post tax (RPS)

COLUMBUS FIELD UPDATE (Serica 50%)

● Field Development Programme filed

● Reserves booked for first time

● Field Proved & Probable Reserves

Gas 77.4 bcf

Oil 4.76 mm bbl

Total 17.7 mm boe

● BG drilled 23/21-7 in December 2008

with four penetrations of Forties sand

and results under evaluation

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● Technical concepts used to discover

Columbus are now being used by

Serica to explore much larger

prospects in Ireland and the East Irish

Sea

IRELAND - BANDON PROSPECT (Serica 50%)

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● Bandon exploration well spudded 11 May with Ocean Guardian rig

● World class petroleum system (Sherwood). Prospective gas in place of 230 – 1700 bcf

IRELAND - BANDON PROSPECT (Serica 50%)

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● Triassic Sherwood sand prospect. Seismic anomaly (inset) may indicate gas

EAST IRISH SEA – CONAN PROSPECT (Serica 100%)

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● Conan prospect farm-out programme ongoing. Rig available late 2009

● World class petroleum system (Sherwood) with prospective gas in place of 1,000 bcf

INDONESIA – KUTAI PSC (Serica 54.6%)

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● Offshore 3D seismic acquired (Area 5) and 2D survey nearly complete (Area 1)

● Interpretation shows a variety of prospects. Farm-out programme in preparation

INDONESIA - EAST SERUWAY PSC (Serica 100%)

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● East Seruway PSC awarded to Serica (100%) in October 2008

● Approx 5,800 sq km with prospects similar to those in the Glagah-Kambuna TAC

● One well commitment in first three years

VIETNAM - 06/94 PSC (Serica 10% post farmout)

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● Farm-out agreed: AWE will pay Serica’s 33% of three wells. Serica retains10%

● Tuong Vi oil and gas prospect to be drilled in June

NORTH SEA – CHABLIS FIELD (Serica 65%)

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● Well 48/16b-3 drilled – P&A January 2009. Top reservoir lower than forecast

● Gas in place in central area est. at 30 bcf – further evaluation of results in progress

● Possible additional gas in eastern and western areas

25th ROUND AWARD – 48/16a (Serica 100%)

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● Block 48/16a (part) may contain upside to the west of the Chablis core area

● Protection acreage to support any eventual Chablis development

25th ROUND AWARD 15/21g (Serica 30%)

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● Block 15/21g has a large Jurassic Fulmar sand stratigraphic play

● 3D seismic reprocessing commitment to refine the Spaniards lead into a prospect

25th ROUND AWARD – 110/2d (Serica 100%)

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● Block 110/2d in the East Irish Sea – Sherwood sandstone seismic anomalies

● Watson prospects could be tied back to the Morecambe field if successful

INCOME STATEMENT

Group Consolidated Income Statement2008 2007

(US$000) (US$000)

Continuing operations

Administrative expenses

Pre-licence costs

Asset write offs

Share-based payments

Other

(8,628)

(1,150)

(24,034)

(1,781)

(516)

______________

(7,813)

(287)

(9,282)

(1,962)

245

______________

2008 Notes:

Limited increase despite greater activity.

Successful applications in UKCS and Indonesia.

Spain & UKCS (Oak and Chablis) written down.

Mainly 2005-7 awards.

Depr. of office equipment, currency gains + losses.

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Operating loss before net finance revenue & tax

Profit on disposal

Net finance (costs) / revenue

Loss before taxation

Taxation credit for the year

Loss for the year from continuing operations

Discontinued operations

(Loss)/profit for the year from discontinued ops

Loss for the year

(36,109)

36,620

(1,315)

______________

(804)

228

______________

(576)

(395)

(971)

(19,099)

-

2,348

______________

(16,751)

432

______________

(16,319)

2,690

(13,629)

Sale of 15% of Kambuna for US$52.7mm.

Charges increased as Kambuna debt drawn down.

Reduction in deferred liabilities due to write-offs.

Norwegian disposal – timing of tax recoveries.

BALANCE SHEET

Balance Sheet2008 2007

(US$000) (US$000)

Non Current Assets

Exploration & evaluation assets

Property, plant and equipment

Goodwill

Financial assets + other receivables

Current Assets

Inventories

Trade and other receivables

Cash and cash equivalents

69,711

68,526

295

5,445

______________ 143,977

4,618

7,069

56,822

71,874

19,543

768

5,904

______________ 98,089

6,991

21,906

26,025

2008 Notes:

E+E spend net of US$24mm write-offs.

Kambuna development costs net of part disposal.

Part allocated to Kambuna disposal.

Restricted cash balances, Indonesian VAT.

Kambuna field and exploration materials.

Partner and other recoveries (2007 – rig deposit).

Unrestricted cash deposits.Cash and cash equivalents

TOTAL ASSETS

Current liabilities

Trade and other payables

Financial liabilities

Non-current liabilities

Financial liabilities

Deferred income tax liabilities

TOTAL LIABILITIES

NET ASSETS

Share capital + other reserves

Accumulated deficit

TOTAL EQUITY

56,822

______________

68,509

______________

212,486

(14,599)

(32,105)

-

(295)

______________

(46,999)

______________

165,487

223,143

(57,656)

______________

165,487

26,025

______________

54,922

______________

153,011

(23,604)

-

(9,582)

(3,910)

______________

(37,096)

______________

115,915

172,600

(56,685)

______________

115,915

Unrestricted cash deposits.

Principally Kambuna work.

Drawing under debt facility.

2007 drawings under debt facility transferred to current.

2007 liabilities released upon Norway disposal.

Increased through placing, raising US$48.6mm.

CASH FLOW STATEMENT

Cash Flow Statement2008 2007

(US$000) (US$000)

Net cash outflow from operations

Cash flows from investing activities:

Purchase of property, plant and equipment

Purchase of exploration & evaluation assets

Proceeds from disposals

Interest received

______________

(5,338)

(62,605)

(27,939)

55,831

1,898

______________

(10,169)

(185)

(63,446)

5,000

2,873

2008 Notes:

Kambuna development (classified as E&E in 2007)

Spend in UK, Indonesia and Vietnam.

Kambuna & Kutai part disposals (2007 Lematang)

On cash deposits.

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Net cash used in investing activities

Cash proceeds from financing activities:

Net proceeds from shares and options

Proceeds from loans

Finance costs paid

Net cash from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

______________

(32,815)

48,762

25,000

(1,425)

______________

72,337

34,184

22,638

______________

56,822

______________

(55,758)

1,588

9,671

-

______________

11,259

(54,668)

77,306

______________

22,638

Impact of peak spend period mitigated through disposals.

28.9 million new shares issued.

Drawings under debt facility.

Net interest paid after capitalisations.

Cash reserves increased during challenging period.

MAJOR SHAREHOLDERS

No. of shares % holding

Canadian Depository

Caledonia Investments

Fidelity International Ltd

AXA Framlington

Cede & Co

Cenkos

37,432,444

25,501,736

23,021,998

10,226,501

8,509,497

8,468,654

21.2

14.4

13.0

5.8

4.8

4.8

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Market capitalisation at 8 May 2009 c. US$160 million

176 million shares issued (187 million fully diluted)

Management shareholding 4.8% (10% fully diluted)

Cenkos

JP Morgan Asset Management

Mr A Craven Walker

8,468,654

7,291,271

5,704,473

4.8

4.1

3.2

FINANCIAL HIGHLIGHTS

Financial Position

● US$49 million net placing in January 2008

● US$52 million cash received from disposal of 15% of Kambuna

● Significant financial contribution (c. $70 million) from farmouts

● US$57 million cash and US$32 million debt at 31 December 2008

● US$38 million cash and US$45 million debt at 31 March 2009

● Bank facility extended by 1 year

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Active Asset Management of Financial Exposures

● Sale of 15% Kambuna interest

● Contingent payment on Bream field (Norway) production without further cost

● Chablis farm-out raised 56% of well cost (Serica retains 65%)

● Vietnam farm-out raised 33% of cost of 3 wells (Serica retains 10%)

● Bandon farm-out raised 100% of well cost (Serica retains 50%)

● Conan and Kutai farm-out programmes ongoing

First revenue from Kambuna due mid year 2009

KEY EVENTS FOR 2009

● 1H 09

● February – Extension of Senior Debt Facility

● March – Vietnam farmout

● April – Annual Results

● May – Drilling Bandon prospect in Ireland

● June – Results of Bandon well

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● June – Results of Bandon well

● June – Drilling Tuong Vi prospect in Vietnam

● Mid-year – Kambuna production starts

● 2H 09

● Results of Tuong Vi well

● Conan prospect farm-out - East Irish Sea

● Columbus development plan approval

● Kutai farm-out

SUMMARY

Serica is confident of growth in 2009

● First production revenue due from Kambuna mid-year

● Finances strengthened through:

● 2008 asset sales

● Successful farm-outs

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● Successful farm-outs

● Extension of debt facility

● High potential exploration (Bandon & Conan prospects)

● Columbus development project progressing

● Further exploration new ventures where Serica can add value

● M&A activity if shareholder value can be enhanced

Business

Sqz Ob 12th May