SHARES in North Sea-focused Serica Energy received a four per cent bump yesterday after the firm announced that its Columbus development has been given the go-ahead by the Oil and Gas Authority (OGA).

The firm expects to extract up to 7,800 gross barrels of oil equivalent when production begins in the Central North Sea field in mid-2021.

Timing of the development is dependent on a pipeline connecting the Shell-operated Arran and Shearwater platforms being completed by the third quarter of 2020. It is intended that oil extracted at Columbus will be exported along with that from the Arran field before being separated into gas and liquids at Shearwater and exported to terminals onshore.

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Serica chief executive Mitch Flegg said gaining the consent for Columbus after submitting a field development plan in June was a “successful outcome”.

He added that the company’s work on the field would allow it to “enhance our understanding of [the] nearby exploration acreage” secured as part of a round of licences granted by the OGA earlier this year.

The company’s shares, which closed at 104p on Tuesday, were trading at as much as 110p for much of yesterday before ending the day at 108.5p.

Aim-listed Serica’s shares have been on an upward trajectory since the start of October, when the firm announced that it had moved closer to completing the acquisition of a 50% stake in the Rhum gas field from BP. The other half of the field is owned by Iranian Oil Company UK, a subsidiary of the state-owned National Iranian Oil Company

While that deal was agreed last November, it had been unable to complete over fears that production would be mothballed due to US sanctions on Iran.

READ MORE: Shares in North Sea firm surge as Iran sanctions fears ease

However, the US Treasury granted a licence to the Rhum field at the start of October, leading to a 45% increase in Serica’s share price.

The rise to 110p saw the London-based company’s shares break the £1 barrier for the first time since late 2007, giving the firm a market capitalisation of £290 million in the process. The company is currently valued at £275.35m.

News on the Columbus development comes after Serica last week announced that a nine-month blockage in the North Sea Erskine to Lomond pipeline had been removed, allowing production from Erskine to restart.

Erskine is operated by oil major Chevron, which owns a 50% stake. Chrysaor has a 32% interest in the field and Serica 18%.

Serica is the operator of the Columbus development, in which it retains a 50% stake. The other 50% is divided equally between Endeavour Energy UK and the UK arm of American exploration company EOG Resources.

OGA chief executive Andy Samuel said the organisation, which is an executive agency of the UK Government’s Department for Business, Energy and Industrial Strategy, was pleased that the partners would now “proceed with their investment in the Columbus development”.

“Columbus is the final component of the OGA’s Central Graben Area Plan, which also included the recently sanctioned Fram and Arran fields, unlocking over 50 million [barrels of oil equivalent] recoverable reserves which had struggled for decades to be developed,” Mr Samuel said.

READ MORE: Shell provides fresh boost for North Sea oil and gas industry

“It is good to see how the industry has collaborated on many fronts to deliver additional value as part of our maximising economic recovery in the UK agenda and we look forward to Columbus delivering first hydrocarbons in 2021.”

Serica is also in the process of buying stakes in the producing Keith and Bruce fields, which are located 200 miles north east of Aberdeen, from BP and French oil giant Total.

The £52m BP deal is linked to the Rhum acquisition announced last November. The $5m acquisition of Total's stake was announced in August.