Serica Energy plc said 2021 was an outstanding year of progress, with pre-tax profits of £135.1 million, from the company’s oil and gas portfolio in the UK North Sea.
FINANCES
The company’s results for the year ended 31 December 2021 showed the increase compared with £12.5m in 2020.
Group gross profit for 2021 was of £386.8m (2020: loss of £2.9m).
Cash flow from operations was £157.6m (2020: £44.1m), closing cash of £103.0m (2020: £89.3m) plus a further £115.4m of temporary cash security (2020: £1.8m).
Serica said that it would pay a dividend of 9 pence per share, subject to shareholders’ approval.
PRODUCTION
A revised independent audit of field reserves reported Serica’s share of estimated remaining 2P reserves as 62.2m boe as at 1 January 2022.
In August, the company brought Rhum R3 well into production and the Columbus development well in late November.
Bruce, Keith and Rhum produced 20,300 boed net to Serica for 2021 (2020: 21,500 boed) after an extended summer maintenance programme.
Erskine field production averaged 1,650 boed net to Serica (2020: 2,300 boed) after a three-month shut-in to upgrade production module.
ESGs
Serica reported a 16% reduction in flare volumes compared with 2020.
Scope 1 CO2 emissions were approximately 208,900 tonnes (2020: 204,650t).
The company incorporated delivery of ESG targets for flaring, emissions and waste into incentivisation schemes for all staff.
OUTLOOK
Serica issued 2022 production guidance range narrower and reduced from 27,100-33,600 boed to 26,000 boed-30,000 boed.
The company said this reflected lower Columbus production rates and current supply chain limitations causing 2022 programme delays.
The North Eigg exploration well is due to spud in early Q3 2022.
STRATEGY
“2021 was an outstanding year of progress for Serica, which demonstrated the value of our through-cycle investment strategy resulting in the R3 and Columbus projects reaching first production,” said chief executive Mitch Flegg.
“This increases Serica’s gas output to over 85% of our total production, further increasing our contribution to the provision of vital lower carbon gas to the UK’s energy market.
“As always, we continue to look for acquisition opportunities that fit our criteria and will add value for our stakeholders.”