Serica’s profits surge 8,840 per cent amid soaring oil and gas prices
Soaring oil and gas prices and booming production has powered Serica Energy to an 88-fold surge in profits year-on-year.
The North Sea fossil fuel producer has announced pre-tax profits of £194.5m for the first six months of trading this year, up from merely £2.2m in the same period in 2021 when oil and gas prices were still recovering from the pandemic spiral.
Over this year’s highly lucrative trading period, Serica has seen net production increase 41 per cent, from 18,855 barrels of oil equivalent per day (boepd) to 26,600 boepd.
This has been fuelled by new investments coming online at the Columbus and Rhum wells, alongside an intervention at the Bruce field.
Meanwhile, revenues have climbed to a whopping £353.5m, up from £100.8m in the first half of last year.
Its position has become increasingly highly liquid, with operating cash flow rising to £312m, from £72.8m previously.
Following the massive boost in profits, Serica chief executive Mitch Flegg revealed that the company will pay out an interim shareholder dividend of eight pence per share in November.
However, he has ruled out buybacks until Serica obtains the initial results for its North Eigg exploration well, targeting 60m boe – which are due in December.
If the spudding was successful a rapid development will needed to make the most of the time-limited incentives of the Energy Profits Levy.
There is also little expectation the Serica-Kistos Energy merger will be reignited, after both firms made offers for each other over the summer with neither side able to agree on terms.
Flegg said: “Although it proved not possible to reach agreement with Kistos on the terms of the respective potential offers between the two companies, Serica continues to actively seek opportunities at both the asset and corporate level that would strengthen the company, diversify its asset base and deliver incremental value to shareholders.”