1st Apr 2025 10:06
(Alliance News) - Serica Energy PLC on Tuesday lowered production guidance and cut its dividend but said Triton is now expected to resume operations in June.
In response, shares in Serica rose 7.8% to 144.40 pence in London on Tuesday morning.
The North Sea-focused oil and gas producer said pretax profit more than halved to USD160 million in 2024 from USD380 million in 2023, with basic earnings per share of 24 US cents, down 31% from 35 cents.
Revenue fell 7.9% to USD727 million in 2024 from a restated USD789 million in 2023.
Capital expenditure near trebled to USD278 million from USD99 million, while operating cashflow fell 3.8% to USD452 million from USD470 million.
Production totalled 34,600 barrels of oil equivalent per day in 2024, down from a pro forma 40,100 boepd in 2023, impacted by unscheduled downtime at the Triton floating production, storage, and offloading vessel.
Reduced production of around 27,600 boepd in the first quarter of 2025 was due to the shutdown of the Triton FPSO in February and March, the firm explained.
Production has been disrupted due to damage caused by Storm Eowyn in January.
The Triton area consists of eight producing oil fields in the UK North Sea, located east of Aberdeen, Scotland and the Triton FPSO is the infrastructure and export hub for the area.
Dana Petroleum Ltd and Waldorf Production UK Ltd are Serica's partners in the Triton cluster.
More positively, Serica said that following discussions, the Triton joint venture partners have decided to bring forward the summer maintenance period.
This will deliver increased uptime for the remainder of the year versus previous expectations. Production from Triton is now expected to resume in June, with no further planned shutdowns in 2025.
Chief Executive Chris Cox said it was frustrating delay, "exacerbated by the fact that the Triton area alone could be delivering up to 30,000 boepd net to Serica with the addition of the wells already drilled."
Reflecting the operational issues at Triton, production guidance for 2025 has been amended to 33,000 to 37,000 boepd, down from around 40,000 boepd previously.
But with maintenance work at Triton set to complete in June, and no summer shutdown to then follow, portfolio production in the second half is forecast to be materially ahead of the full-year 2025 guidance range.
Serica cut the final dividend to 10 pence per share from 14p. This brought the total payout to 19p and overall shareholder distributions to the equivalent of 23p per share, in line with returns paid in 2023.
The company said the "prudent rebalancing" of the dividend ensures that it will retain liquidity, to take "full advantage of the many organic and inorganic opportunities ahead".
Cox said this will give increased flexibility to allocate capital to the areas where it will deliver best value for shareholders.
Serica said it continues to be "very active" in screening cash-generative and value-accretive M&A opportunities in both the UK North Sea and other geographies.
But it pledged to remain disciplined and will only conclude transactions with the potential to deliver "material value" to shareholders.
It also retains the capacity to carry out further share buybacks.
Capital expenditure and operating expenditure guidance for 2025 is unchanged, at USD220 to USD250 million and around USD330 million respectively.
By Jeremy Cutler, Alliance News reporter
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