Serica Energy PLC · LSE:SQZ
Serica Energy — Shareholder Meeting (June 2021)
20 slides from Serica Energy's shareholder meeting presentation, Jun 24, 2021
Slide 1: Annual General Meeting
Annual General Meeting Creating a strong foundation for further value creation 24 June 2021
Slide 2: Disclaimer
Disclaimer • This document is personal to the recipient and has been issued by Serica Energy plc (the "Company"). This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor
Slide 3: Opportunities on the path to Net Zero
Opportunities on the path to Net Zero • The slowdown in new development activity and investment will impact UKCS production within the next decade North Sea Transition Deal • In all credible scenarios, the UK will consume far more oil and gas on the path to net zero, and beyond, than it is able to p
Slide 4: Serica – reduced emissions vs. imported LNG
Serica – reduced emissions vs. imported LNG 59 kgCO2e/boe* Imported LNG <18 kgCO2e/boe Serica Imported Liquid Natural Gas (LNG) Since becoming Bruce operator, creates over twice as much Serica has achieved an average carbon greenhouse gas as production from intensity figure of <18 kgCO2e/boe, the UK
Slide 5: Serica fully supports the industry's 'Vision 2035' initiative
Serica fully supports the industry’s ‘Vision 2035’ initiative “Current government forecasts suggest that gas will remain a vital part of the UK’s energy mix as we move towards Net Zero. As long as this demand exists, managing declining North Sea production to maximise value, minimising greenhouse ga
Slide 6: The opportunities for Serica
The opportunities for Serica SERICA HAS THE SKILLS TO THRIVE AS PART OF THE NET ZERO TRANSITION There will be continued gas demand during the transition to Net Zero Over 80% of Serica’s production is gas There is continued support for UK production Serica is already making a contribution to security
Slide 7: 2020 – Summary
2020 – Summary Serica is emerging strongly from a challenging year and reported profits for the year both before and after tax, enabling an increased dividend payment despite a severe industry downturn. Solid results in a difficult year combined with financial resilience enables an increased dividen
Slide 8: COVID-19
COVID-19 Serica has experienced no interruption in production due to the COVID-19 outbreak Manning levels reduced on the Bruce platform from over 130, initially to below 90 but now to around 110 in order to: • Reduce the risk of an outbreak • Allow social distancing offshore • Provide isolation area
Slide 9: Oil & gas prices
Oil & gas prices Heren NBP day-ahead gas prices (p/th) (Brent spot shown as comparison) 70 • Average oil and gas prices were depressed during 2020 60 • Serica’s production is over 80% gas • The recovery in gas prices since mid-2020 has been spectacular 50 with current gas prices significantly higher
Slide 10: Updated reserves report
Updated reserves report • Serica commissioned a new Competent Person’s Report (“CPR”) effective 1 January 2021 • This identified several upgrades to 2P Reserves estimates particularly due to the successful efforts to extend the prognosed Cessation of Production (“COP”) on Bruce which impacts Bruce,
Slide 11: R3 Intervention – workover operations
R3 Intervention – workover operations BEFORE AFTER Tree Cap Crown Plugs Discarded wire and toolstring Prong and plug (mechanical barrier) Down Hole New 7” tubing Safety Valve and downhole 500m Hydrate plug equipment with Possible trapped high- 5-1/2” tubing Downhole PT pressure gas gauge + cable + p
Slide 12: R3 Intervention – operations concluded
R3 Intervention – operations concluded Objective Status Safe operation with no reportable incidents No incidents despite severe weather conditions and COVID-19 pandemic Remove wire, toolstring, plug and prong Completed successfully at first attempt Dissociate hydrate plug Completed successfully usin
Slide 13: R3 Intervention results
R3 Intervention results • Achieved 58.4 mmscf/d of gas and 135 bbls/d of condensate through a 60/64ths inch choke, constrained by well test package • Test rate equivalent to around 10,000 boe/d or 600,000 therms/day (which at current prices equates to a potential gross daily proceeds of around £350,
Slide 14: Columbus development project
Columbus development project • Serica is 50% owner and Operator of the Columbus Development • The reservoir will be drained by a single horizontal well tied into the Arran to Shearwater pipeline • Development well was spudded with the Maersk Resilient Heavy-Duty Jack-up rig in March 2021 • The well
Slide 15: Columbus development progress
Columbus development progress Key Events Timeline Event Status Export Pipeline Installed Controls Umbilicals Installed C & AN Manifolds Installed Arran South Wells Drilled Arran North Wells Drilling Columbus Well Drilled Arran South Manifold Installed Shearwater Tie-in Q3 2021 Arran Start-up Q3 2021
Slide 16: North Eigg – exploration well to be drilled in 2022
North Eigg – exploration well to be drilled in 2022 Unrisked Prospective Resources (Recoverable) • The North Eigg exploration prospect is estimated to contain 367 bcf Serica Internal Estimates (P50) and potentially over 1Tcf (P10) of recoverable gas (unrisked) • North Eigg shares many geological sim
Slide 17: Financial strength
Financial strength • Serica’s diverse portfolio has limited decommissioning liability due to the terms of the Erskine transaction and the various BKR transactions Percentage of Net Cash Flow Retained • Serica’s share of BKR net cash flow increases to 100% on 1 Jan 2022 (BKR Net Cash Flow Sharing) Un
Slide 18: 2021/22 Production guidance
2021/22 Production guidance Total Production Forecasts ('000boe/d net to Serica) 40 Annual average production rates 35 2020 2021 2021 2022 2022 30 Actual Min Max Min Max Asset boe/d boe/d boe/d boe/d boe/d 25 BKR 21,500 20,600 23,600 22,500 27,000 20 Erskine 2,300 1,900 2,400 1,600 2,600 15 Columbus
Slide 19: Summary
Summary • Pre and post-tax profit reported for 2020 • Increased dividend of 3.5p per share recommended at 2021 AGM • Significant reduction in carbon emissions and flaring during 2020 • Investment in three capital growth projects to underpin rising production • R3 Intervention (completed) • Columbus
Slide 20: For further information visit
For further information visit Website www.serica-energy.com Email info@serica-energy.com Linkedin linkedin.com/company/serica-energy-plc