Serica Energy PLC · LSE:SQZ
Serica Energy — H1 2019 Earnings Presentation
30 slides from Serica Energy's earnings presentation, Sep 24, 2019
Slide 1: Interim Results
SERICA ENERGY plc INTERIM RESULTS NEW IMAGE HERE Financial results for six months to 30 June 2019 24 September 2019
Slide 2: Disclaimer
Disclaimer • This document is personal to the recipient and has been issued by Serica Energy plc • Certain statements, beliefs and opinions in this document, are forward-looking, and is directed only at, in the United Kingdom, qualified investors who are persons (the "Company"). This document does n
Slide 3: Serica Energy: Establishing a leading mid-tier oil and gas producer
Serica Energy Establishing a leading mid-tier oil and gas producer • Serica is a British-based independent upstream oil and gas company with operations centred on the UK North Sea where we have a full range of exploration, development and production assets • We operate the Bruce, Keith and Rhum fiel
Slide 4: Highlights
01 Highlights 4 Serica Energy plc – 2019 Interim Report – September 2019
Slide 5: 1H 2019 highlights
1H 2019 highlights PRODUCTION OPERATING PROFIT CASH AND DEPOSITS CURRENCY OPERATING COSTS 31,100 boe/day 30% Reduction £52.5 million £88.2 million £ 1H 2019 production levels increased to Operating costs (including production, Operating profit from continuing Total cash balances and term deposits Th
Slide 6: 1H 2019 Financial Results
02 1H 2019 Financial Results 6 Serica Energy plc – 2019 Interim Report – September 2019
Slide 7: Group income statement
Group income statement For the period ended 30 June 2019 Six months ended Six months ended Year ended 30 June 2019 30 June 2018 31 Dec 2018 £’000 £’000 £’000 Sales revenue 146,375 3,304 35,708 • Includes BKR interests for full period Cost of sales (93,941) (5,247) (15,690) Gross profit / (loss) 52,4
Slide 8: A healthy balance sheet with a strong cash position
A healthy balance sheet with a strong cash position For the period ended 30 June 2019 • Serica has an extremely healthy balance sheet with a strong cash position 30 June 2019 31 Dec 2018 30 June 2018 £’000 £’000 £’000 • Near term fixed liabilities are covered more than four-fold Non-current assets 3
Slide 9: 1H 2019 enhanced daily production on all production assets
1H 2019 enhanced daily production on all production assets Continued strong production (all figures net to Serica) ERSKINE BKR 1H 2019 1H 2019 28,100 3,000 boe/d boe/d 1H 2019 daily production is 12% higher than FY 2018 results 1H 2019 daily production is 393% higher than FY 2018 results (FY 2018: 2
Slide 10: Cash Position
Cash Position Sustained cash build • 30 June 2019 cash, cash equivalents and term deposits totalled £88.2 million (this compares Cash, cash equivalents and term deposits with £15.9 million at 30 June 2018 and £43.1 £ million million at 31 December 2018) 100 90 • Under the BKR Net Cash Flow Sharing a
Slide 11: Corporate Profile
03 Corporate Profile Serica has repositioned itself as a leading independent producer 11 Serica Energy plc – 2019 Interim Report – September 2019
Slide 12: Serica is now a leading independent producer on the UK Continental Shelf
Serica is now a leading independent producer on the UK Continental Shelf Following its acquisitions of various interests UKCS net production ranking, split by operated and non in the Bruce, Keith and Rhum fields, Serica operated production (2019e, kboe/d, excludes majors and NOCs) 200 has become a m
Slide 13: Serica is the 10th largest independent operator on the UK Continental Shelf
Serica is the 10th largest independent operator on the UK Continental Shelf As operator of BKR Serica is responsible for UKCS ranking of gross operated production* operating over 40,000 boe/d of gross (2019e, kboe/d, excludes majors and NOCs) production 160 140 120 100 80 60 40 20 - 13 Serica Energy
Slide 14: Operational Improvements
04 Operational Improvements As a nimble operator Serica can take a dynamic, decisive approach to the workplace, re- energising the operating culture by empowering our talented team 14 Serica Energy plc – 2019 Interim Report – September 2019
Slide 15: Case study one: Field trial increases Bruce daily gas production
Case study one: Successful field trial of technical innovation increases Bruce daily gas production by ~15% • A 2014 field development plan had identified an opportunity to provide The opportunity sustained production increases by lowering suction pressures on the Bruce and Keith wells but trials we
Slide 16: Case study two: Bringing all wells online at Bruce
Case study two: Bringing all wells online by re-energising Bruce operating culture • Three of Bruce’s 26 wells have been out of service for up to 5 years due to a The opportunity combination of equipment failures and plant upset when wells were brought online • Inspected failed equipment, identified
Slide 17: Case study three: Inspiring the workforce to identify improvements
Case study three: Inspiring the workforce to challenge the norm and identify opportunities for improvement • Escape to sea ladder required fabric maintenance (cleaning up and painting) to prevent corrosion. Work is carried out over the side directly above the sea and in the ‘splash The opportunity z
Slide 18: Case study four: Maximising production and increasing operating options
Case study four: Maximising production and increasing operating options • In recent years interventions on Bruce had focused on protecting current production, not enhancing it The opportunity • Serica’s new culture of innovation facilitated a cross-discipline discussion within the team, seeking an o
Slide 19: Rhum Performance
Rhum Performance Improving Rhum Reservoir Management • Rhum is a gas field producing from two subsea wells (R1 and R2) tied back to Bruce • A third well (R3) was drilled but never put into production due to technical issues • R3 would produce from the same reservoir as R1 and R2. When put in product
Slide 20: Strategy
05 Strategy 20 Serica Energy plc – 2019 Interim Report – September 2019
Slide 21: We continue to implement the ongoing strategy to deliver growth
We continue to implement the ongoing strategy to deliver growth Leverage team and technology to maximise efficiency • talented, motivated team in place and Aberdeen HQ fully operational • focus on maximising economic recovery of oil & gas • harness technology and creativity to extend life of fields
Slide 22: What's next? Operations
What’s next? Operations PRODUCE BKR DEVELOP Columbus OPERATE Bruce Hub • The Columbus development work continues • The extensive infrastructure associated with • Serica continues to drive forward with the Bruce field offers significant capacity for on schedule for first production in 1H 2021 efficie
Slide 23: What's next? Finance
What’s next? Finance • Serica’s diverse portfolio has limited decommissioning liability due Diversified portfolio with low to the innovative nature of the Erskine transaction and the various BKR transactions decommissioning liability • Serica’s share of BKR Net Cash Flow increases by 20% at 1 Jan 20
Slide 24: What's next? Corporate
What’s next? Corporate Serica’s strategy is to identify and acquire assets where we can add value. This started with the Erskine acquisition completed in 2015 and continued with the 2018 BKR transactions ONGOING STRATEGY Serica has demonstrated the ability to unlock value by addressing complex comme
Slide 25: Serica Energy: Establishing profile
Serica Energy Establishing profile • Serica has established itself as a leading mid-tier oil and • Over 80% of our production is natural gas, which has gas producer significant environmental advantages over other fossil fuels and so is a key element of the Energy Transition • We have created a stron
Slide 26: Appendix
06 Appendix 26 Serica Energy plc – 2019 Interim Report – September 2019
Slide 27: Our Board
Our Board Tony Craven Walker Mitch Flegg Neil Pike Executive Chairman Chief Executive Non-executive Director • A leading figure in the British independent oil • Over 35 years’ experience in the upstream oil • Involved in the global petroleum business as a industry since the early 1970s, having start
Slide 28: Our Board
Our Board Ian Vann Trevor Garlick Malcolm Webb Non-executive Director Non-executive Director Non-executive Director • Joined BP in 1976 • Over 35 years’ experience in North Sea • Joined Burmah Oil in 1974 as a legal adviser • Directed and led BP's global exploration Upstream operations and developme
Slide 29: Senior management team
Senior management team Andy Bell Stephen Lambert Clara Altobell Mike Killeen VP Finance VP Commercial VP Technical VP Operations Danny Fewkes Carol Stewart Fergus Jenkins Group Treasurer Business Manager Manager of Projects 29 Serica Energy plc – 2019 Interim Report – September 2019
Slide 30: For further information visit www.serica-energy.com
For further information visit www.serica-energy.com or email info@serica-energy.com 30 Serica Energy plc – 2019 Interim Report – September 2019