Serica Energy PLC · LSE:SQZ
Serica Energy — Shareholder Meeting (June 2020)
25 slides from Serica Energy's shareholder meeting presentation, Jun 25, 2020
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING Strong performance in a challenging environment 25 June 2020 Serica Energy plc Corporate Update 2020 1
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: Strong Performance in a Challenging Environment
Strong Performance in a Challenging Environment Serica is well-positioned to deal with twin challenges of COVID-19 and commodity price uncertainty ROBUST FINANCES • Very strong balance sheet • Healthy cash balance GENERATING OPPORTUNITY • No borrowings • Limited decommissioning liabilities • We have
Slide 4: Business Environment
DYNAMIC INNOVATIVE INDEPENDENT BUSINESS ENVIRONMENT
Slide 5: Commodity Prices
Commodity Prices Spot Gas Prices (p/th) Heren NBP day-ahead 30 • Commodity prices have been depressed during 2020 25 20 • Serica’s production is over 80% gas; spot gas prices are shown in the upper chart and the futures curve is shown below 15 • Serica’s operating cost in 2019 was $12.60/boe 10 5 •
Slide 6: No Interruptions in Production due to COVID-19
No Interruptions in Production due to COVID-19 • Serica is responsible for around 5% of the UK’s gas production • Essential to power UK’s critical infrastructure • We moved quickly to review operational processes and devise safe, workable measures to protect our team and maintain steady production •
Slide 7: Established Environmental, Social and Governance credentials
Established Environmental, Social and Governance credentials • As a demonstration of transparency, Serica has published its first ever Environmental, Social and Governance (“ESG”) Report and created a dedicated role of VP ESG • In 2019 we reduced flaring and CO2 emissions compared to 2018 • We have
Slide 8: Oil & Gas: An Essential Industry in the UK
Oil & Gas: An Essential Industry in the UK The UK Oil & Gas industry provides • 270,000 jobs across the UK* • £24 billion to UK GDP* (1.2% of the UK total) • Intensive training of next generation skilled workforce • Gas as a low-carbon transition fuel Serica’s contribution to the future of the North
Slide 9: Serica fully supports the industry's 'Vision 2035' Net Zero initiative
Serica fully supports the industry’s ‘Vision 2035’ Net Zero 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 gree
Slide 10: 2019 Results
DYNAMIC INNOVATIVE INDEPENDENT 2019 RESULTS Serica Energy plc AGM Presentation – June 2020 10
Slide 11: 2019 – Strong Performance in a Challenging Environment
2019 – Strong Performance in a Challenging Environment • A British-based independent upstream oil and gas company with operations centred on the UK North Sea with a full range of exploration, development and production assets • Serica has no borrowings and limited decommissioning liabilities NET PRO
Slide 12: Cash Position
Cash Position Cash, cash equivalents and term deposits / £ million • 31 December 2019 cash, cash equivalents and term 120 deposits totalled £101.8 million (this compares with Total cash £101.8 million (Outstanding prepayment £27.2 million of net cash at 31 December 2018) facility nil) 100 • During 2
Slide 13: Reserves Upgrade
Reserves Upgrade • Serica commissioned a new Competent Person’s Report (“CPR”) effective 1 January 2020 • This has identified several upgrades to 2P Reserves estimates particularly due to the successful efforts to extend the prognosed Cessation of Production (“COP”) on Bruce • The latest CPR estimat
Slide 14: Commodity Price Hedging
Commodity Price Hedging • At the time of entering into the BKR transaction with BP, Serica purchased ‘put’ options* at 35p to cover 60% of the retained gas production, after net cash flow sharing, purchased from BP for 2018 and 2019 and 40% of retained production for the first half of 2020 • Since t
Slide 15: Maiden Dividend
Maiden Dividend • Our prime objective is to increase shareholder value both through technical excellence and acquisition in order to diversify risk, replenish our basket of assets and fully utilise the Company’s operational and financial strengths • We enter 2020 in a very robust financial position
Slide 16: Technical & Operational
DYNAMIC INNOVATIVE INDEPENDENT TECHNICAL & OPERATIONAL 16
Slide 17: North Sea Portfolio
North Sea Portfolio PRODUCE • Serica is operator of and has a 98% interest in Bruce, a 100% interest in Keith and a 50% interest in Rhum • Serica has an 18% non-operated interest in the Erskine field DEVELOP • Serica is operator of and has a 50% interest in the Columbus development • First productio
Slide 18: 2020 Expenditure
2020 Expenditure • Serica has no borrowings and healthy cash reserves. However, in light of recent commodity price weakness, a thorough evaluation of operating costs OPERATING COSTS has been undertaken • Despite the additional costs associated with the Bruce caisson repairs it has been possible to i
Slide 19: The Rhum Field (Serica 50%) - Summary
The Rhum Field (Serica 50%) - Summary • Rhum produced over 13,700 boe/d (net) from only two wells in 2019 • A third well (R3) was drilled when the field was originally developed but was not put into production due to mechanical problems with equipment in the well • Serica is working on a project to
Slide 20: Columbus (Serica 50%) - Operated Development Project
Columbus (Serica 50%) - Operated Development Project • Columbus will be drained by a single subsea well, which will be connected to the Arran-Shearwater pipeline, through which Columbus production will be exported along with Arran field production • At Shearwater the production will be separated int
Slide 21: Moving Forward
DYNAMIC INNOVATIVE INDEPENDENT MOVING FORWARD
Slide 22: Financial Strength
Financial Strength • Serica’s portfolio has limited decommissioning liability due to the Full lifecycle portfolio with innovative nature of the Erskine transaction and the various BKR transactions low decommissioning liability • Serica’s share of BKR Net Cash Flow increased by one-fifth at 1 Jan 202
Slide 23: Corporate Activity
Corporate Activity UK oil & gas production vs. number of producing companies • There are still nearly as many producers in the UK today as there There are still almost as many producers in the UK as in the 1990’s and 2000’s when production was double what it is today were twenty years ago when oil &
Slide 24: Continuing Strategy to Deliver Growth
Continuing Strategy to Deliver Growth Maximise production and reduce costs with full emphasis on Health, Safety and the Environment • Talented, motivated team in place and delivering results GENERATE • Focus on maximising economic recovery of oil & gas by reducing costs and remaining profitable at l
Slide 25: 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 Serica Energy plc AGM Presentation – June 2020 25