NORTH Sea-focused Serica Energy has seen its shares surge 12 per cent after the company paved the way to it ramping up production from a flagship field off Shetland.

Serica announced that it had installed new production equipment in a well that has lain unused for years on the Rhum gas field.

Chief executive Mitch Flegg said the well has flowed the equivalent of over 10,000 barrels oil per day in testing. Initial analysis of test results suggested the well has performed at the upper end of expectations.

It is expected to come onstream in the third quarter.

A successful start to production from the R3 well would vindicate Serica’s decision to invest in a field that a bigger fish appeared to have lost interest in.

READ MORE: Plans to develop billion barrel oil field off Shetland set to be revived

Serica acquired a 50 per cent interest in Rhum from BP, with a North Sea portfolio it bought from the oil giant in 2017.

As the other 50% interest in Rhum is owned by the Iranian national oil company, the acquisition left Serica facing potential political complications.

However, directors saw potential to generate good returns by investing in increasing production from Rhum.

The field was brought onstream in 2005 but only two of the three production wells were put into use.

Serica had to complete a workover which involved removing old equipment from the R3 well and installing new kit.

READ MORE: Can big oil firms get off back foot in climate change debate?

The company experienced delays associated with harsh weather conditions and technical issues. It has faced logistical challenges operating offshore amid the pandemic. Serica had to win an exemption from the US authorities to ensure production from Rhum could continue after Donald Trump imposed fresh sanctions on Iran.

Serica recently underlined its appetite for more North Sea acquisitions.

The firm has headquarters in London and an operations base in Aberdeen. It employs more than 100 people in the Granite City.

Shares in the firm closed up 14p at 132p.