Serica Energy Plc · LSE:SQZ
Serica Energy — FY2022 Earnings Presentation
17 slides from Serica Energy's earnings presentation, Apr 13, 2023
Slide 1: Growing Our Business: 2022 Full Year Results and Outlook
GROWING OUR BUSINESS 2022 Full Year Results and Outlook Serica Energy plc
Slide 2: Serica Energy plc 13 April 2023 2022 Full Year Results and Outlook
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Slide 3: Serica 2022 Highlights
SERICA 2022 HIGHLIGHTS Average net production increased by 18% to 26,200 boe/d (2021: 22,200 Higher Production boe/d) Serica net 2P reserves increased to 74.9 million boe at end 2022 (2021: Increased Reserves 62.2 million boe). Serica 2022 production replaced more than two-fold Operating Profit of £
Slide 4: 2022 Financial Highlights
2022 FINANCIAL HIGHLIGHTS Revenue (£million) Unit Operating Costs ($/boe) Operating Profit (£million) 2022 812 2022 15.7 2022 476 2021 514 2021 16.5 2021 246 2020 14.1 2020 -18 2020 126 2019 12.6 2019 88 2019 251 2018 18.0 2018 8 2018 36 Profit After Taxation (£million) Full Year Dividend (p/share)
Slide 5: Commodity Price Volatility
COMMODITY PRICE VOLATILITY Monthly Average Heren NBP day-ahead gas prices (p/th) • Intense gas price volatility has continued (Brent spot shown as comparison) 400 • In 2022 daily average gas prices ranged between 10p/th and 516p/th 350 • The annual average market gas prices have been as follows: 300
Slide 6: Remaining Gas Hedges Declining
REMAINING GAS HEDGES DECLINING Remaining Volume of Hedges (million therms) • Due to Serica’s increasing financial strength, the company has not entered into any new gas hedging since July 2021 160 • At the start of 2022 Serica held hedges covering a total 140 of 146 million therms – structured as pa
Slide 7: Strong Cash Position
STRONG CASH POSITION Cash, cash equivalents and hedging advances (£ million) • Closing cash at 31 December 2022 of £433 million (2021: £103 million) plus a further 500 £24 million of hedging related margin calls 450 (2021: £115 million) 400 350 • End 2022 closing cash after: 300 • £97 million explor
Slide 8: Increased Dividend
INCREASED DIVIDEND • Strong profitability and cash generation during 2022 enabled a maiden interim dividend* of 8p per share** to be paid in November 2022 • Continued profitability and cash generation during 2H 2022 allows Serica to propose a final dividend of a further 14p/share*** • Subject to sha
Slide 9: Focus on the Environment
FOCUS ON THE ENVIRONMENT • Driving down carbon intensity – 32% lower than UK North Sea average for equivalent facilities • Setting emissions reduction targets • Engineering solutions to achieve goals • Supporting new technology Bruce CO2 Intensity kg/boe Emissions reduction target Year 20 Baseline 2
Slide 10: Acquisition of Tailwind
ACQUISITION OF TAILWIND 13 April 2023 Serica Energy plc 10
Slide 11: Strategic Rationale for Tailwind Transaction
STRATEGIC RATIONALE FOR TAILWIND TRANSACTION • Portfolio strengthened by adding new production hub in the Triton Area Diversifies portfolio resulting in a balanced mix of gas and oil • Introduces multiple short-cycle organic growth opportunities Production & reserves • Serica becomes top 10 UK produ
Slide 12: The acquisition of Tailwind creates a balanced portfolio of assets
The acquisition of Tailwind creates a balanced portfolio of assets with growth potential across two main production hubs 2023 net production guidance 40-47,000 boe/d 47% oil, 53% gas 11 producing fields 2 producing hubs 200+ staff 80% of production In London, Aberdeen and operated by Serica offshore
Slide 13: CPRs Demonstrate Success
CPRs DEMONSTRATE SUCCESS Proforma 2P Reserves Movement (mmboe) • New Competent Person’s Reports have been issued for both the Serica and Tailwind portfolios • The Serica portfolio net 2P reserves increased from 62.2 mmboe at end 2021 to 74.9 mmboe at end 2022 • The Tailwind portfolio net 2P reserves
Slide 14: Outstanding Q1 2023 Production
OUTSTANDING Q1 2023 PRODUCTION • Net production for the combined 70,000 Serica and Tailwind portfolios averaged 46,800 boe/d during Q1 2023 60,000 50,000 • The introduction of the Gannet GE-04 well has boosted total production to 40,000 above 60,000 boe/d on several occasions during March 30,000 • F
Slide 15: Sanctioned Short-Cycle Growth Projects
SANCTIONED SHORT-CYCLE GROWTH PROJECTS • Bruce Light Well Intervention Campaigns (2023 & 2024) • Bittern B1z well • Gannet GE-05 infill well • Evelyn phase 2 well • Guillemot NW infill well Serica Energy plc 13 April 2023 2022 Full Year Results and Outlook 15
Slide 16: A New Growth Phase for Serica
A NEW GROWTH PHASE FOR SERICA Despite the challenging fiscal regime in the UK, the Tailwind transaction provides the following: Enhanced Organic Growth Opportunities • Creates a diverse, balanced and resilient production portfolio with multiple organic investment opportunities such as Bruce and Trit
Slide 17: For further information visit www.serica-energy.com
For further information visit www.serica-energy.com Email: info@serica-energy.com linkedin.com/company/serica-energy-plc @SericaEnergyplc Serica Energy plc Serica acquisition of Tailwind assets – January 2023