24th Sep 2019 09:17
(Alliance News) - North Sea oil & gas producer Serica Energy PLC posted a profit on Tuesday, following its transformation acquisition from BP PLC.
At the end of November 2018, Serica completed the acquisition of the Bruce, Keith, and Rhum fields in the UK North Sea, taking stakes from both BP and commodities giant BHP Group PLC. It now holds all of Keith, 98% of Bruce, and 50% of Rhum.
For the six months to June 30, Serica produced 31,000 barrels of oil equivalent per day, compared to 26,000 barrels during the whole of 2018. The 2018 figure has been stated assuming Serica had owned the three fields throughout the year.
Revenue was GBP146.4 million, far higher than the GBP3.3 million a year before following the BRK acquisitions. This helped Serica posted a pretax profit of GBP51.9 million, after a loss of GBP7.9 million year-on-year.
Field operating costs fell 30% year-on-year, while Serica has a "very healthy" balance sheet. It is still looking at when it can start returning cash to shareholders via dividends.
Chief Executive Mitch Flegg commented: "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."
"Our balance sheet is now amongst the strongest in our peer group. We anticipate this performance continuing into the second half and beyond."
Flegg said the BRK fields are all doing well, with all Bruce wells producing together for the first time in "some years".
Serica shares were 6.4% lower on Tuesday morning in London at 126.41 pence each.
By George Collard; [email protected]
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