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Serica Energy boosted as acquisitions lift profits

Production ended the year at a high point, thanks to the BKR acquisition and the restart of the Erskine operations in October
oil and gas operations
Net production was marked in at around 30,000 boepd

Serica Energy PLC (LON:SQZ) shares advanced almost 10% in Wednesday morning’s deals after it revealed that acquisitions and a resumption of key operations boosted profits.

Financial results for 2018 showed a 30.6% increase in gross profit, to US$25.2mln.

Operating profit for the year amounted to US$9.1mln, down from US$14.1mln due to US$11.7mln of one-off costs tied to the transition of the acquired BKR assets.

Profit after tax came in at US$74.7mln, including US$52.9mln reported as a ‘bargain purchase gain’ on the BKR assets.

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BKR - comprising the Bruce, Keith and Rhum fields – produced some 24,000 barrels of oil equivalent per day net to Serica, and, the assets contributed for just one month of 2018, following the deal completion on 30 November.

Serica had two-and-a-half months of production from the 18%-owned Erskine field following its restart on 24 October. Erskine averaged production at 3,100 boepd net to Serica during the five months to the end of March.

Another key milestone in the year, was the approval of the Columbus field development with ‘first gas’ production targeted in 2021.

Looking at 2019, the company said it “continues to see strong income flows” and noted that group production amounted to 30,000 boepd in the first quarter.

“We aim to extend the field life of the BKR assets by concentrating on enhancing recovery and reducing costs through eliminating unnecessary complexity,” said Mitch Flegg, Serica chief executive.

He added: “We also aim to expand the portfolio at all stages - exploration, appraisal, development and production.”

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Serica Energy PLC Timeline

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