Serica Energy, a British independent upstream oil and gas company with operations in the UK North Sea today announces its financial results for the six months ended 30 June 2023.
Commenting on the results, Mitch Flegg, Serica's CEO stated:
"The completion of the Tailwind acquisition in March represented a step change in the scale and diversity of Serica, achieving a longstanding strategic goal. We have stated consistently our intention to continue investing in the enlarged portfolio, to add to it in a disciplined fashion if the right opportunities arise and to make further cash returns to shareholders. Accordingly, we look forward to near continuous well and drilling activity across the Bruce and Triton hubs during the next eighteen months and are pleased to announce today an interim dividend of 9 pence per share. This is up from 8 pence per share for the interim dividend in 2022, following the full year dividend of 22 pence per share last year.
Serica’s current circumstances and optimism reflected in its investment plans should not mask the fact that we share the widespread concerns within the sector about the health of the UK’s offshore upstream industry given the current fiscal regime and future uncertainties. We welcome the UK government’s recent Call for Evidence regarding long term fiscal policy. However, the problems we see need to be addressed urgently in order to restore confidence in the sector.”
First Half 2023 Highlights
- Completed acquisition of Tailwind Energy Investments Limited on 23 March 2023 increasing 2P reserves to 130 million boe (pro forma as at 31 December 2022).
- Combined portfolio produced 49,350 boe per day on a pro forma basis (1H 2022: 38,100 boe per day) balanced between gas (55%) and oil (45%).
- Carbon intensity (kg of CO2 per boe) of production from Bruce and Triton hubs lower in 1H 2023 than 1H 2022.
- Profitability maintained with higher sales volumes largely offsetting lower gas prices.
- Highly cash generative portfolio of assets. Cash flow from operations of £266 million (1H 2022: £267 million) contributing to gross cash of £444 million as at 30 June 2023 after tax payments of £141 million, net cash outflow of £44 million arising from the acquisition of Tailwind Energy and reduction of £48 million in debt acquired with Tailwind.
- Net cash of £234 million as at 30 June 2023.
- Average realised gas price of 96 pence per therm (1H 2022: 136 pence per therm) and realised average oil price of US$64 per barrel (1H 2022: US$108 per barrel).
- Average operating cost per boe of US$17.5 (1H 2022: US$16.1 per boe).
- Operating profit £159 million (1H 2022: £196 million).
- Interim dividend of 9 pence per share (2022: 8 pence per share) announced today following the full year dividend of 22 pence per share for 2022. The interim dividend is payable on 23 November to shareholders registered on 27 October 2023 with an ex-dividend date of 26 October 2023.
- Work on multiple Bruce and Keith wells being undertaken during remainder of 2023 and in 2024 to boost production performance.
- Four-well Triton hub drilling campaign sanctioned for execution in 2024. Rig option exercised for 5th well in 2025.
- Progress towards development of Belinda field with submission of draft FDP to NSTA. Decision not to undertake further drilling on North Eigg.
- Production guidance for 2023 amended to 40-45,000 boe per day due to slower than expected ramp up of production from Bruce and Triton hubs following planned summer shutdowns. Group operating costs expected to remain below US$20 per boe.
KeyFacts Energy: Serica Energy UK country profile