Serica Energy plc has concluded an agreement for the sale of its 10% interest in the Lematang Production Sharing Contract, onshore south Sumatra, to Lundin Petroleum AB ('Lundin Petroleum') for US$5 million in cash subject to the required partner and Indonesian government approvals.

The block includes the nearly depleted Harimau gas field and the Singa gas field development project. As at 31 December 2005 the net book value of the assets disposed of was US$2.4 million, with attributable turnover and profit for the year ended 31 December 2005 of US$0.1 million.

Paul Ellis, Chief Executive, commented:

'Given our focus on the development of Serica`s operated Kambuna and Tanjung Perling fields offshore Sumatra, Lematang was no longer a core asset due to the small level of working interest that we held. Following the disposal of this interest Serica also holds operatorship of all its assets in Indonesia, the UK North Sea and Spain. The proceeds from this sale will be deployed effectively in other parts of Serica`s portfolio, such as the Kambuna Field, which is due to come on stream in 2008, and where we recently increased our holding from 55% to 65%.'