North Sea firm Serica this morning posted a group profit after tax of $10.8million.
The figure is an increase on last year’s $6.5million and was recorded during a year that its Erskine Field battled a six-month shut-in.
Serica’s chief executive said the company was ready to build its portfolio in the North Sea and on the hunt for strong buys.
Tony Craven said: “Serica has continued to strengthen its financial position after a particularly strong fourth quarter. Following an especially good performance in terms of production rates and efficiencies, lower opex and improved sales prices since the restart of Erskine field production in late August, we enter 2017 with a strong balance sheet, no borrowings, growing cash resources and increasing opportunities to add value from our existing oil
and gas resources.
“We are looking to build on this strong financial base. Our immediate focus is to broaden and expand our producing asset base through progressing the Columbus field to development and by acquiring additional production where we believe Serica can add value. The UK North Sea, where there are strategic benefits, tax efficiencies and opportunities on offer and where we feel we have an edge, remains a prime area of focus.
On the exploration front, we are delighted that operations have now commenced in preparation for drilling a well on the Rowallan prospect on which we have a 15% carried interest. A successful outcome of this well would have a material impact on Serica. In Ireland and Namibia we have received licence extensions from the authorities and continue to progress our holdings where we see real future potential.”
Serica has a cash balnce of $16.6million and expects that to increase to $25.7million by the end of the quarter.
Its Erskine field restarted production on August 29, 2016. Since then it has averaged more than 3,150 boe per day net to Serica with production efficiencies averaging 90%.
Serica’s operating and transportation costs for Erskine average below $14 per boe.
Its Columbus field, which Serica has a 50% operator stake in, is making progress towards development, according to the firm.
Two potential development options are under review in collaboration with nearby operators.
They include a an extended reach development well drilled from the Lomond platform delivering capital cost efficiencies and easier maintenance access, or a subsea well completion tied into a proposed third-party pipeline to the Shearwater platform.
Serica is working towards selection of the best alternative and a full Field Development Plan by the end of 2017 with a view to commencing development work in 2018. First gas is
targeted for late 2019.
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