AIM-listed Serica Energy, a leading British independent upstream oil and gas company with operations in the UK North Sea, has announced its audited financial results for the year ended 31 December 2025.
Chris Cox, Serica's CEO, stated:
'Serica delivered positive strategic progress in 2025, significantly strengthening our portfolio and organisation, and positioning the Company for materially increased production and the delivery of future growth. Successful acquisitions mean that Serica will have an increasingly resilient and diversified portfolio, with production set to reach over 65,000 boepd by the end of 2026 as they all complete. Our production is generating material cash flows, enhanced further at current commodity prices, boosting our liquidity position and supporting our ability to allocate capital to both attractive growth opportunities and shareholder returns. Our disciplined capital allocation is focused on the short-cycle, low-risk opportunities in our portfolio.
Following our newly completed transaction with TotalEnergies we also operate strategic West of Shetland gas processing infrastructure serving one of the UKCS’ most prospective hydrocarbon regions at a time when the importance of domestic gas supply is so starkly in focus. 2026 will be a year of further delivery on our strategy as we high-grade and progress our organic growth opportunities, and deliver stronger, more reliable performance across a diversified asset base. Serica is better placed than ever to create sustainable value for shareholders and be an important contributor to the UK’s energy security.'
Highlights
Production set to rise materially over the course of 2026
- Production of 27,600 boepd in 2025 (2024: 34,600 boepd), impacted by unscheduled downtime at the Triton FPSO
- Production year to date of 38,600 boepd, following a production interruption for further maintenance work at the Triton FPSO
- Production has averaged over 50,000 boepd since resumption from Triton on 9 March
- Production from Serica's portfolio has the potential to exceed rates of 65,000 boepd by the end of 2026, once all acquisitions announced in 2025 have been completed
Successful M&A delivering increased production, cashflows, and growth opportunities
- Announced four cash-generative acquisitions through 2025 at an attractive combined valuation of $3.3/boe per 2P boe of reserves
- Acquisition of 40% of the Greater Laggan Area ('GLA'), West of Shetland, from TotalEnergies has now completed, with a net completion payment of $56 million received by Serica
- The acquisition adds production of just over 5,000 boepd from GLA net to Serica, as well as additional potential growth opportunities with the Glendronach tie-back and Tormore infills, while the strategic Shetland Gas Plant offers material value creation potential from owned and third-party business
- The number of producing fields in the Serica portfolio is set to more than double once all acquisitions complete, significantly increasing the diversification, reliability and predictability of future production and revenues
Material increase in reserves and resources following completion of acquisitions
- 2P reserves of 116.8 mmboe as at end-2025 (end-2024: 118 mmboe), broadly evenly split between oil (58.9 mmboe) and gas (57.9 mmboe), following 2025 production of 10.4 mmboe
- Pro forma for the completion of acquisitions announced in 2025, 2P reserves increase 19% to 138.5 mmboe, of which 54% is gas
- Acquisitions are gas weighted and add longer-life producing fields to the portfolio
- 2C resources increased 16% to 103.4 mmboe as at end-2025 (end-2024: 89 mmboe), driven by additional infill well opportunities at Bruce and the farm-in to the Wagtail licence
- Pro forma 2C resources of 112.6 mmboe, boosted by the inclusion of a 40% stake in Glendronach, as the Company grows its organic hopper materially through M&A
Organic growth options have the potential to sustain and grow production well into the next decade
- Market screening for a rig is currently underway with a view to drilling a programme of new wells targeting infills and tie-backs in the broader Serica portfolio, potentially to commence with infill drilling at the Bruce field in 2027. Low-risk new wells have the potential to add materially to production, with very short payback and highly attractive returns
Balance sheet strength and efficient tax position supports investment in growth and returns
- Cash and restricted cash of $31 million (31 December 2024: $148 million) as at 31 December 2025
- Total liquidity of $290 million, comprising cash, restricted cash and undrawn committed RBL facility availability as at 31 December 2025 of $259 million
- Borrowings of $231 million (31 December 2024: $231 million), resulting in a net debt position of $200 million as at 31 December 2025
- Net debt position to more than halve in Q1, following receipt of $56 million from TotalEnergies
- Group tax assets more than doubled in 2025, with a notional value of over $1 billion
- Loss after taxation for 2025 of $52 million, following previously announced non-cash deferred tax charge of $65 million taken in Q1 2025 as a result of the extension of EPL to 2030
- Final dividend declared today of 10 pence per share (2024: 10 pence per share) subject to approval at Serica's 2026 AGM
- The final dividend is payable on 24 July 2026 to shareholders registered on 26 June 2026, with an ex-dividend date of 25 June 2026
Outlook and guidance - significant uplift in production forecast
- Unchanged guidance for 2026 production of significantly over 40,000 boepd
- Capital expenditure guidance of $175-195 million and opex guidance of $380-400 million unchanged
- Material free cash flow was forecast to be generated in 2026 even at an oil price of $63/bbl and gas price of 69p/therm, with cash generation significantly higher at current commodity prices
- Serica has been proactively and opportunistically building its hedge book mostly since early March, taking advantage of sharp increases in the front end of the curve in both oil and gas while bolstering downside protection
- Completion processes for Catcher, Golden Eagle Area Development and Spirit Energy assets are on track and due to complete through the course of 2026
- The Company continues to be active, but highly selective, in screening a broad range of cash-generative and value accretive M&A opportunities, in both the UK North Sea and overseas
- Serica remains committed to moving from AIM to the Main Market of the LSE at the earliest viable opportunity in 2026, which is now expected to be during Q3
Source: Serica Energy
