Serica Back in Black Thanks to Takeovers

UK independent Serica Energy returned to profit in the first half, bolstered by its North Sea acquisitions late last year.

The London-listed player managed a pre-tax profit of £52mn ($64.6mn) in the six-month period, it said in financial results published on September 24, versus an £8mn loss a year earlier. Revenues soared to £146mn from a mere £3.3mn, thanks to the addition of stakes in the Bruce, Keith and Rhum fields to Serica’s portfolio.

Serica secured 98% of Bruce, 100% of Keith and 50% of Rhum through a series of acquisition deals with BHP Billiton, BP, France’s Total and Japan’s Marubeni, completed last November. Prior to these transactions its only output came from a non-operated position at the Erskine field.

“The first half of 2019 has demonstrated the financial benefits of the transactions that we completed at the end of last year, and which have transformed Serica into a leading North Sea operator,” CEO Mitch Flegg said in a statement. He went on to say Serica now boasted a balance sheet “amongst the strongest in our peer group.”

Serica flowed 31,000 barrels of oil equivalent/day in the first half, with its full-year guidance set at 26,000-30,700 boe/day. Operating cash inflow rocketed up to £89.8mn from £5.3mn, while unit operating costs slumped more than 30% to $12.3/boe.

Serica has filed an application with US authorities to remove output restriction at Rhum, where it is partnered with the Iranian Oil Co. (IOC). It said its Columbus project was still on track for first gas in 2021.