Serica Energy Plc · LSE:SQZ
Serica Energy — H1 2021 Earnings Presentation
21 slides from Serica Energy's earnings presentation, Sep 28, 2021
Slide 1: 2021 Half Year Results Presentation
2021 Half Year Results Presentation See Interim Report | Link to Shareholder Recording 28 September 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: Serica Energy
Serica Energy A nimble, dynamic and experienced company, Serica is now one of the UK’s leading mid-tier independent oil and gas companies responsible, through the Bruce platform, for around 5% of the UK’s gas production Our talented team of 160+ manages a full-cycle portfolio of high-quality assets
Slide 4: Investing in growth
Investing in growth Serica’s strong balance sheet with significant cash, no debt and limited decommissioning liabilities enables it to pursue Production >80% its investment strategies unaffected by short-term commodity price fluctuations gas Current government forecasts suggest that gas will remain
Slide 5: First Half 2021
First Half 2021 Investing in Growth Solid Production Improved Cash Flow Financial Strength Continued ESG Success • Successful R3 intervention • Net Serica production 1H 2021: • Increased Sales Revenue 1H • Cash plus hedging advances of • On course to achieve a 20% leading to first production in 18,9
Slide 6: Group Income Statement (unaudited)
Group Income Statement (unaudited) For the period ended 30 June 2021 6 months ended 6 months ended Year ended 30 Jun 2021 (£000) 30 Jun 2020 (£000) 31 Dec 2020 (£000) Sales revenue 100,835 45,953 125,641 76% gas (2020: 70%) , gas 50p/therm (2020: 14p/therm), $43.30/boe (2020: $15.2/boe) Operating co
Slide 7: Group Balance Sheet
Group Balance Sheet 30 Jun 2021 31 Dec 2020 30 Jun 2020 (£000) (£000) (£000) Exploration & evaluation assets 1,632 1,043 4,009 Property, plant and equipment 338,113 311,125 313,171 Mainly cost of BKR acquisition plus subsequent capital spend on R3 and Columbus Total non-current assets 339,745 312,16
Slide 8: Cash Position
Cash Position 120 Cash, cash equivalents and hedging advances* / £ million £102.7 million Cash, cash equivalents and hedging advances at 30 June 2021 (£91.1 million 31 December 2020) 100 During the first six months of 2021: 80 £18.0 million £43.0 million 60 BKR liabilities paid Net capital expenditu
Slide 9: 2021 production
2021 production Serica net production (boe/d) • BKR production levels in the first half of 2021 were impacted by the planned shutdown of the Forties Pipeline System from late May until late June 30,000 • During this period valuable maintenance programmes were carried out in order to protect and enha
Slide 10: Oil & gas prices
Oil & gas prices A period of intense commodity Heren NBP day-ahead gas prices (p/th) (Brent spot shown as comparison) price fluctuation 150 140 • Average oil and gas prices were depressed during 2020 130 • Serica’s production is over 80% gas 120 110 • The recovery in gas prices since mid-2020 has be
Slide 11: Commodity price hedging
Commodity price hedging • Serica has a hedging policy to provide downside protection in case of low commodity prices Weighted average price Volume of gas p/th th/d • In H1 2021 Serica had gas price hedging in place covering up to 25% of retained gas sales Q1 21 42.5 185,000 (or around 20% of total o
Slide 12: R3 Intervention delivers incremental production
R3 Intervention delivers incremental production The Rhum Field (Serica 50%) R3 intervention programme R3 first production 23 August 2021 • Rhum is a subsea development tied back to • Complex engineering project Increasing average gross production from the Bruce platform complex which lies 44 km the
Slide 13: Columbus development project
Columbus development project A Serica-led project from concept to delivery Shearwater 37.21km Columbus C1z • Serica is 50% owner and Operator of the Columbus Development CTIS Oil (Condensate) • The reservoir will be drained by a single horizontal well tied into the Arran Export to FPS to Shearwater
Slide 14: 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 Completed Arran Start-up Q3 20
Slide 15: Infrastructure led exploration project – North Eigg
Infrastructure led exploration project – North Eigg • The North Eigg exploration prospect is estimated to contain 315bcf (P50) Unrisked Prospective Resources (Recoverable) Serica Internal Estimates (updated 2021) and potentially over 1Tcf (P10) of recoverable gas (unrisked) • North Eigg shares many
Slide 16: 2021/2022 production guidance
2021/2022 production guidance Total Production Forecasts Annual average production rates ('000boe/d net to Serica) 2020 Actual 2021 2021 2022 2022 40 Min Max Min Max 35 Asset boe/d boe/d boe/d boe/d boe/d 30 BKR 21,500 20,600 21,600 22,500 27,000 25 Erskine 2,300 1,700 2,400 1,600 2,600 20 Columbus
Slide 17: Characterising future M&A targets
Characterising future M&A targets • REGIONAL FOCUS: Our operating expertise is in the Central A rigorous screening process, building on & Northern North Sea and, coupled with potential tax operating efficiencies, reducing costs, synergies, this means that the search for new opportunities is focused
Slide 18: Summary: Well positioned for the future
Summary Well positioned Strong balance sheet, no debt, limited decommissioning liability Production > 80% gas, benefitting from record high wholesale gas prices for the future Increased dividend of 3.5p per share paid in July 2021 Continued significant reduction in carbon emissions and flaring durin
Slide 19: Major shareholders
Major shareholders Number of Shares % of issued Share Capital AXA Framlington Investment Management 32,565,343 12.14% Mr D Hardy & Mrs D Hardy 28,220,958 10.52% Canaccord Genuity Wealth Management 18,903,234 7.05% BP Exploration Operating Company 13,500,000 5.03% Hargreaves Lansdown Asset Management
Slide 20: Our board
Our board Tony Craven Walker Mitch Flegg Andy Bell Kate Coppinger Trevor Garlick Richard Rose Ian Vann Malcolm Webb Executive Chairman Chief Executive Chief Financial Officer Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director Serica Ene
Slide 21: 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