AIM-listed Serica Energy has issued the following trading and operations update, ahead of the Company's Annual General Meeting ('AGM') to be held later today.
Serica will issue 2024 half-year results on Tuesday 5 August 2025.
Chris Cox, Serica's CEO, stated:
'Maintenance work at Triton remains on track to restart production around the end of June, with the addition of new wells from the Guillemot North West and Evelyn fields providing the potential for production from the Triton Hub alone to surpass the 25,000 boepd net to Serica delivered earlier in the year. This should support significant cash generation in the second half of the year and beyond.
The drilling performance and subsurface results of those new wells have been outstanding, and the BE01 well on Belinda was also completed ahead of time and under budget. The impressive flow test rate of 7,500 boepd announced today is another demonstration of our ability to identify and deliver subsurface opportunities, and Belinda (in which we have 100% working interest) will add to our production early next year after the requisite subsea infrastructure is completed.
As we continue to focus on creating shareholder value both organically and through accretive M&A, our subsurface team is now focused on converting Kyle and future Bruce well volumes from resources to reserves. However, in order to take FID on these growth investments we will need a regulatory and fiscal regime that supports the delivery of projects in the UK North Sea, and the production of vital homegrown energy.'
Performance
- Zero lost time injuries ('LTI') in 2025 to date, now over five years since the last LTI at Serica production operations
- Production of 26,500 boepd in the first four months of 2025
- Cash of $129 million as at 30 April (31 December 2024: $148 million), a cash outflow of $19 million due to the lack of production from Triton since January, a $10 million payment made on completion of the acquisition of Parkmead (E&P) Limited, and capital expenditure predominantly on the Triton well programme of $80 million
- Net debt of $102 million as at 30 April (31 December 2024: net debt of $83 million)
- Free cash flow for the year set to be boosted by future receipt of the previously announced tax rebate of $71 million relating to 2024
- Serica maintains a robust hedging book, with c.40% of estimated 2025 production and 20% of 2026 hedged. Hedges are weighted towards oil, with the floor price of $69/bbl for 2025 being in excess of current market prices for Brent
Operational update
- Repairs to Triton following issues discovered in the aftermath of Storm Éowyn have now been completed and production will resume once the annual maintenance programme, brought forward to reduce overall downtime in the year, is complete. The resumption of production remains on track to occur around the end of June
- The Triton Hub was producing at a rate of approximately 25,000 boepd net to Serica immediately prior to the shutdown. Following restart, both the W7z well on the Guillemot North West field (Serica: 10%) and the EV02 well on the Evelyn field (Serica: 100%), which were delivered on schedule and under budget during the Triton downtime, will be brought onto production for the first time
- The BE01 well on the Belinda field (Serica 100%) was also drilled and completed ahead of schedule and under budget. The well has now been flow tested through the COSL Innovator rig this week, delivering rates of 7,500 boepd, constrained by the surface well test equipment design specifications. Work is underway on the installation of subsea infrastructure, and Belinda is expected to be tied in to Triton and to enter production in early 2026
- Serica continues progressing plans to convert material 2C resources into reserves, should the appropriate fiscal and regulatory environment allow
- Subsurface work to date has confirmed the attractiveness of the Kyle redevelopment (Serica 100%), and subsurface and front-end design work tenders are set to be issued later this year, with the potential for FID in early 2026
- Analysis of opportunities for drilling on the Bruce field has resulted in the identification of over 20 potential infill targets. These will be high-graded over the remainder of 2025, with a view to selecting the best possible opportunities for a future drilling campaign
M&A
- Following the receipt of all relevant approvals the acquisition of 100% of the shares in Parkmead (E&P) Limited completed at the end of April
- The transaction provides optionality regarding future projects, simplifies decision making, and provides strategic flexibility relating to the existing position in Skerryvore
- Through the transaction, Serica has acquired an additional £197 million of ring-fence corporation tax ('CT') losses, £181 million of supplementary charge tax ('SCT') losses, £1 million of Energy Profits Levy ('EPL') losses and £12 million of activated investment allowances
- This brings our total ring-fence tax loss balances in USD to over $1.3 billion CT, $1.2 billion SCT, and $63 million EPL
- The Company continues to take a disciplined approach to M&A and is active in screening a broad range of cash-generative and value accretive opportunities in both the North Sea and other geographies
Outlook and unchanged 2025 guidance
- Final dividend of 10 pence per share (2023: 14 pence per share) announced, subject to approval at today's AGM
- The final dividend is payable on 25 July 2025 to shareholders registered on 27 June 2025, with an ex-dividend date of 26 June 2025
- Production guidance reiterated at 33,000-37,000 boepd
- Capital expenditure and opex guidance unchanged, at $220-250 million and c.$330 million respectively
- In order to enhance Serica's corporate profile and broaden the Company's access to a wider pool of UK and global investors, Serica has initiated workstreams to facilitate a move from the AIM to the Main Market of the London Stock Exchange in Q4 2025. Further updates on this process will be provided in due course
Click here for full announcement
Source: Serica Energy
