Serica Energy Plc · LSE:SQZ
Serica Energy — FY2015 Earnings Presentation
15 slides from Serica Energy's earnings presentation, April 2016
Slide 1: Results presentation
Results presentation April 2016 Serica is a fast-growing, agile player set to benefit from its Erskine acquisition and well placed for future opportunities
Slide 2: Disclaimer
DISCLAIMER The information presented herein is subject to amendment and has not been independently verified. Serica Energy plc (“Serica”) does not represent that the information and opinions contained herein are necessarily adequate or accurate and no liability is accepted for any errors or omission
Slide 3: Highlights
HIGHLIGHTS Cash of Production of Profitable producer US$24M 3,000 at end March ‘16 boepd over H2 2015 High impact Profit after tax of Zero debt, no exploration material portfolio US$6.5M commitments 3
Slide 4: Financials: Profit and Loss 2015
FINANCIALS Profit and Loss 2015 ($Millions) Revenue 24.0 7 months’ production Serica share price vs Brent Crude price Operating costs (6.6) $10.90/boe after exceptional Q3 credits DD&A (1.3) $2.20/boe reflects low Erskine acquisition cost GROSS PROFIT 16.1 Pre-licence costs and net (8.5) Exploration
Slide 5: Financials: Balance sheet
FINANCIALS Balance sheet 2014 2015 ($Millions) ($Millions) Exploration and evaluation assets 58.1 51.9 Columbus investment to date plus retained exploration PP&E - 8.9 Erskine acquisition Deferred tax - 2.4 Total non-current assets 58.1 63.2 Inventories and receivables 2.3 4.6 Mainly December 2015 s
Slide 6: Operations Strategy
OPERATIONS STRATEGY Deliver value from our portfolio of production, development and exploration assets in Europe and Africa Lower costs and increase production Increase reserves and extend field life Pursue synergies through collaboration with partners in Central North Sea infrastructure hub Operate
Slide 7: Erskine Material Benefits
ERSKINE MATERIAL BENEFITS • Low cost/boe acquisition • Higher production capability • Reduced operating costs • Strong cash flow • Increased reserves • Efficient utilization of tax position • Strategic position in hub infrastructure 6,000 BOE/D (Net) 5,000 4,000 3,000 2,000 1,000 0 7 Erskine has hug
Slide 8: Erskine: Impact on Company Performance
ERSKINE: IMPACT ON COMPANY PERFORMANCE Share price performance since June Gross profit of 2015 Erskine acquisition INCREASED $16.1M from 18% PRODUCTION interest in Erskine Net production H2 ’15 3,000 boepd 2015 gross profit $16 million End March ‘16 cash $24 million Current market cap $38 million EX
Slide 9: Erskine: Offtake Route & Infrastructure
ERSKINE: OFFTAKE ROUTE & INFRASTRUCTURE Erskine Platform Lomond Processing • Unmanned wellhead platform with 5 • Condensate and gas are separated through the Erskine production wells Production Module (EPM) located on Lomond • Access to wells for wireline intervention • Gas and condensate are pumped
Slide 10: Columbus
COLUMBUS Undeveloped gas condensate field located in UK Central North Sea, 8km north of Lomond Platform Serica’s interest increased from 33.2% to 50% through acquisition of the SSE and BG interests in the field Overall increase in contingent resources from 5.2 mmboe to 6.2 mmboe net to Serica Develo
Slide 11: Covering the Full Cycle
COVERING THE FULL CYCLE PRODUCTION: Erskine Field • Can deliver up to *4,500boepd net to Serica • Average rate for January and February 2016 over 3,300boepd (net) • 4.2mmboe reserves booked at 1 January 2016 DEVELOPMENT: Columbus • Plans are progressing to develop 6.2mmboe contingent resource net to
Slide 12: Seeking Acquisitions
SEEKING ACQUISITIONS Financial credibility and strength • Completion of Erskine deal in tough market adds credibility • Healthy balance sheet builds confidence • Net cash of $24 million and no current borrowings creates capacity Further opportunities within Lomond/Columbus hub • Erskine and Columbus
Slide 13: Corporate Strategy
CORPORATE STRATEGY Seek opportunities where small and nimble players can deliver greater value Take advantage of current low cost/low price environment for acquisitions Limit financial downside exposure and seek opportunities to spread operational risk Extract full value from UKCS ring-fence tax pos
Slide 14: 2016 - Building Momentum
2016 - BUILDING MOMENTUM Further efficiencies on Erskine Identify and progress optimum Columbus offtake route and development Maintain exploration upside without overcommitting funds Build asset base through acquisition Well placed to finance the right deals 14 Clear and simple plan
Slide 15: Summary
SUMMARY Serica is considerably stronger than it was a year ago – notwithstanding wider industry headwinds Cash resources and zero debt position means we are strongly placed to create further value Sustaining low operating costs will drive cash generation in rising oil price environment We must maint