Serica Energy PLC · LSE:SQZ
Serica Energy — Shareholder Meeting (June 2018)
19 slides from Serica Energy's shareholder meeting presentation, Jun 28, 2018
Slide 1: Serica Energy plc Annual General Meeting
Serica Energy plc Annual General Meeting 28 June 2018 Serica Energy plc | AGM Presentation | June 2018
Slide 2: Disclaimer
Disclaimer • The information presented herein is subject to amendment and has • This presentation and its appendix are not for publication, release or not been independently verified. Serica Energy plc (“Serica”) does distribution directly or indirectly, in nor should they be taken or not represent
Slide 3: Highlights
Highlights +310% +105% +58% Operating profit Cash and deposits Group profit 2017 operating profit of US$14.1m Total cash balances and term 2017 Group profit after tax a four fold increase deposits at 31 December 2017: US$34.0m of US$17.1m 2016: US$3.4m 31 December 2016: US$ 16.6m 2016: US$10.8m ~2,0
Slide 4: Group Income Statement
Group Income Statement 2017 2016 US$000 US$000 Production 1,976 boepd (2016: 1,636 boed), oil price US$53.2/bbl ($42.1/bbl), Revenue 31,966 21,432 gas price 41p/therm (33p/therm) Operating costs (10,958) (13,586) Opex/transport costs of US$15/boe down from US$23/boe in 2016 Depletion (1,710) (1,274)
Slide 5: Highlights – Current Operations
Highlights – Current Operations Erskine Columbus Exploration • Production averaged just • Serica, as operator of the • Preparations for a well on under 2,000 boe per day net Columbus field with a 50% the Rowallan prospect in Q4 to Serica during 2017 interest, is moving the field 2018 are progressing
Slide 6: Highlights - BKR
Highlights - BKR Transformational acquisition of BP’s operated interests in the Bruce, Keith and Rhum fields, announced 21 November 2017, expected to complete late Q3 2018, providing Serica with: Additional Significant revenue streams to additions to diversify Serica’s production production portfoli
Slide 7: BKR: An Enabling Acquisition
BKR: An Enabling Acquisition MITIGATES RISK • Bulk of consideration deferred and Bruce 36.00% contingent • Gas sales include hedging Keith 34.83% MAINTAINS BALANCE DIVERSIFIES SHEET STRENGTH • No shareholder dilution Rhum 50.00% • Production streams, now with 4 field • No impact on existing cash int
Slide 8: BKR Production Performance
BKR Production Performance Net BKR Production boe/day 25,000 1 2 3 4 Net Production boe/d 20,000 15,000 10,000 5,000 - Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 • On completion of the acquisition from BP, Serica entitled to 40% share of net cash flow from acquired interests since 1 Janua
Slide 9: US Sanctions Policy
US Sanctions Policy • IOC, a subsidiary of the National Iranian Oil Company, has held a 50% interest in the Rhum licence since 1972 • A ‘snap-back’ of US sanctions on Iran, announced by the US on 8 May imposes additional restrictions potentially affecting Rhum • However, the US secondary/extended sa
Slide 10: Rhum R3
Rhum R3 Bruce facilities • Rhum is a strategic UK gas asset with significant upside potential From • Rhum is currently produced through two subsea wells. A third Keith well (R3) was drilled but never put into production due to technical issues • BP had planned to re-enter R3, re-complete the well an
Slide 11: Maximising Economic Recovery
Maximising Economic Recovery • Serica intends to build upon BP’s operational performance at Bruce, Keith and Rhum to extend field life • Objectives are fully aligned with the aims of the OGA’s Maximising Economic Recovery strategy (MER) • Serica is focused, flexible and financially robust, enabling
Slide 12: BKR Transition Timetable
BKR Transition Timetable 21 November 2017 to now Now through to late Q3 2018 Late Q3 2018 (anticipated) • Transition announced and shares suspended • Satisfy requirements of field partners and • Serica becomes operator of the Bruce, Keith OGA re transfer of operatorship and Rhum fields • Admission d
Slide 13: Erskine (Serica 18%)
Erskine (Serica 18%) • Production for 2017 was 1,976 boe/d net to Serica • Production has been restricted by the condensate export pipeline from the Lomond platform experiencing back pressure caused by wax deposits • This was further impacted by a blockage in the line, as announced on 22 January, wh
Slide 14: Erskine Production
Erskine Production 4,500 4,000 Net Erskine Production (boe/day) 3,500 3,000 2,500 1 2 3 2,000 1,500 1,000 500 - Jan 17 Mar 17 May 17 Jun 17 Aug 17 Oct 17 Dec 17 Feb 18 Apr 18 Jun 18 • Erskine production impacted by Lomond export pipeline blockage • Production for 2017 was 1,976 boe/d net to Serica w
Slide 15: Erskine Bypass Pipeline
Erskine Bypass Pipeline • A 26km section of line will be replaced • A clean line will allow full and regular pigging from the start thus preventing wax build up • Serica’s contribution to the cost is comparable to 40 days of Serica’s share of field revenues • Equipment procurement has commenced and
Slide 16: Columbus Development (Serica 50%)
Columbus Development (Serica 50%) • During 2017, Serica pursued two alternative development options for Columbus - Drilling a subsea well and joining a potential future development of the nearby Arran field to the Shearwater platform, located 35km from Columbus - Drilling an extended-reach developme
Slide 17: Rowallan: UK Block 22/19c (Serica 15%)
Rowallan: UK Block 22/19c (Serica 15%) • Preparations for drilling continue • A pre-drilling site survey was completed in December 2017 • Rig tendering ongoing for expected spud in Q4 2018 • Serica is fully carried and so pays no costs for drilling the well • Success case gross estimated field size
Slide 18: UK 30th Round Award Offers
UK 30th Round Award Offers • Serica has provisionally been awarded blocks in three strategic areas in the Central North Sea • Rowallan South (20%) • The Rowallan Prospect is mapped to continue into the block immediately south of the Serica licence • Serica will have 20% equity with operator ENI and
Slide 19: A Robust Business Base for Future Growth
A Robust Business Base for Future Growth INVEST GROW BUILD TEAM EXPLORE Investing to Increased scale Commitment to Combining expert Exploring future enhance and diversification operational skillsets for team opportunities production and of revenue excellence with breadth and increase reserves stream