Serica (AIM: SQZ) has forecast a “promising” year as the Triton FPSO has resumed production following reports of a “disappointing” end to 2024.
Chief executive Chris Cox said: “The outlook for 2025 is promising, with ongoing work to increase asset reliability and further positive results from the Triton drilling programme expected to boost production and help deliver material free cash flow.”
The Serica boss added that his firm expects “substantial cash generation in 2025” which is set to generate shareholder returns while unlocking further investment into its portfolio.
Triton, operated by South Korea’s Dana Petroleum, resumed production on 27 December, with the export gas compressor restarted two days later “following extensive root cause analysis and remedial work”, Serica previously explained.
Serica ‘screening multiple M&A opportunities’
As a result of the asset’s return to production, Serica outlined its appetite for mergers and acquisitions (M&A) throughout 2025.
The CEO added: “While we continue to deliver value from our existing portfolio, we are also actively screening multiple M&A opportunities to grow and diversify our business.”
In its latest stock market update the operator explained that it will be assessing M&A opportunities “in both the North Sea and other geographies”.
Serica Energy has previously shared strong objections to the UK’s current fiscal climate.
In October the firm told Energy Voice that “political signals across the board are causing companies like us to look overseas”, a concern that it claimed will drive more than just operators to other parts of the globe.
© Supplied by Dana PetroleumHowever, the firm added: “We won’t move out of the UK North Sea where our portfolio of producing fields is financially robust but that shouldn’t be seen as a vote of confidence in government policies.”
Despite its objections, Serica said in November that the UK’s Autumn Budget provided “much needed clarity over future investment allowances” that benefited some of its assets.
This included its flagship Bruce field, 211 miles north-east of Aberdeen, where it outlined an incentive to pursue “attractive new opportunities”.
At the time of this update the firm said it was continuing to explore a potential move from AIM to the Main Market, something it had earmarked for this year.
North Sea firm ups spending in 2024
Revenue dropped for the UK operator in 2024 to $726 million, a near $200 million downgrade from 2023’s $920m.
Throughout the period, the firm upped its spending as capital expenditure reached $260m, more than double that of 2023’s CAPEX which stood at $98m.
Serica’s tax bill was also slashed in 2024 as payments added up to $152m, a significant drop off from 2023’s $348m in cash tax payments. However, it claims that this resulted from lower gas prices and “a full year of Triton loss shelter”.
In addition to the Triton FPSO boosting production for 2025, Serica said that the commencement of production from the GE05 well on the Gannet field in early January is ramping up the number of barrels produced by the firm.
The well has been brought “onto stable production at a rate of over 6,000 bopd [barrels of oil per day]”.
© Serica EnergyCox added: “The five-well drilling campaign at Triton is now halfway through and delivering excellent results, with the Gannet GE05 well performing ahead of expectations.
“This is a further example of the opportunities that our subsurface team are able to find on mature fields, offsetting natural decline.
“We look forward to the results of the remaining three wells in the campaign, and the same team are now maturing new opportunities on the Bruce field.”
The North Sea business expects “reliability and production from new wells” to boost production throughout 2025.
Serica will issue 2024 full-year results on 1 April 2025.
Triton
The Triton area is operated by its namesake floating production storage and offloading (FPSO) vessel.
Serica owns a 46% stake in the Triton FPSO area with operator Dana accounting for 52% of ownership and the remaining 2% is claimed by Waldorf,
The Evelyn, Bittern, Guillemot West and Guillemot Northwest, Gannet E, Clapham, Pict and Saxon fields are currently operated by the vessel.
Of these assets, Serica operates the Gannet E and Evelyn fields, Dana serves as the pipeline operator and Petrforc operates the wells.
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