New US$525 million 6-year Borrowing Facility

London, 18 December 2023 - Serica Energy plc (AIM: SQZ) is pleased to announce the signing of a new US$525 million secured Reserves Based Lending ("RBL") facility.

Mitch Flegg, Chief Executive of Serica, commented:

"I am very pleased to announce the signing of a new RBL facility which substantially enhances Serica's financial firepower. This has been achieved in a challenging market for upstream financing. The standing of the international banks in the lending syndicate reflects the quality of Serica's asset portfolio, strong balance sheet and ambitions for further growth. The new facility, combined with our existing attributes, means that Serica can approach acquisition and investment opportunities from a position of considerable strength."

The new RBL facility replaces Serica's existing RBL and Junior facilities. The existing RBL facility has US$271 million drawn and will be fully repaid upon completion of the new RBL facility, which is expected to occur in January 2024. The Junior facility remains undrawn.

Facility Highlights

• Significantly increased liquidity to support future acquisitions and investments.
• Option of potentially doubling RBL facility to over US$1 billion through an accordion[1] feature.
• Debt maturity deferred by more than two years to end 2029.
• Establishes new relationships with a syndicate of leading international banks.
• Simplified financing arrangement with single facility.

Description of new RBL facility

• US$525 million revolving credit facility available in multiple currencies. Serica's existing RBL facility is in amortisation phase with capacity falling to US$330 million at the end of 2023.
• Maturity date of 31 December 2029 with amortisation commencing on 31 December 2026. Serica's existing RBL facility matures on 30 June 2027.
• Additional uncommitted accordion option of a further US$525 million increasing the potential total facility to US$1,050 million.
• $100 million sub limit which can be utilised to issue Letters of Credit without the need for cash security.
• The Borrowing Base Assets comprise all of Serica's interests in producing fields except the Rhum field.
• Available amount under the facility is subject to semi-annual redeterminations.
• If 50% or more of the amount available is drawn, the minimum commodities hedging requirement is equal to 50% of forecast production from the Borrowing Base Assets in year one and 30% in year two. The hedging requirement is halved if less than 50% of the amount available is drawn.
• Initial interest rate for loan drawings of SOFR[2] plus a margin of 3.90% per annum. The margin under the existing RBL facility is 3.10% per annum.
• Net Debt to Adjusted EBITDAX financial covenant £ 3.5x, tested semi-annually.

The Structuring & Coordination Banks include DNB (Facility Agent & Documentation Bank) and ING Bank N.V.. The Bookrunner Mandated Lead Arrangers include DNB, ING Bank N.V. and Nedbank CIB. The Mandated Lead Arranger is Natixis, London Branch. The Lead Arranger is ICBC Standard Bank plc.

The syndicate of banks received legal advice from Bracewell LLP. Serica received legal advice from Burness Paull LLP.

The financial advisor to Serica was Kirk Lovegrove and Company Ltd.

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