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(Sharecast News) - Serica Energy reported average production of 37,800 barrels of oil equivalent per day for the first nine months of the year on Tuesday, a 20% increase over the same period in 2023.
The AIM-traded company said third-quarter production averaged 26,000 daily equivalent barrels, impacted by scheduled maintenance at the Triton and Bruce hubs.
Production at Triton resumed following repairs to its gas export compressor, with stable flows expected soon.
Revenue for the third quarter was $139m, slightly up from $135m in the same period in 2023, with realised gas and oil prices at 77p per therm and $71 per barrel, respectively.
Rising natural gas prices in the fourth quarter were expected to enhance realisations, alongside hedging unwinds that the board said should bring realised oil prices closer to Brent levels.
Capital expenditure totalled $78m in the third quarter, contributing to a total of $202m for the first nine months.
Cash holdings declined to $258m as of 30 September, primarily due to a $70m final dividend payment and a $40m tax payment, resulting in a net cash position of $27m.
Operationally, Serica said it was continuing its high-impact drilling campaign, tying in the Gannet GE-05 well to the Triton FPSO vessel under budget and ahead of schedule.
Further wells, including Guillemot NW's EC1 and the Evelyn and Belinda projects, were set for production by 2025.
Infill drilling plans at the Bruce hub were meanwhile under review, targeting opportunities not drilled since 2012.
The board said the UK Autumn Budget clarified that first-year allowances against the energy profits levy would be retained, alleviating some uncertainty, but raising economic thresholds for long-cycle investments.
Serica said it would keep assessing merger and acquisition opportunities in the North Sea and beyond, aiming for cash-generative and value-accretive growth.
The company said it expected full-year production for 2024 to average around 37,000 barrels of oil equivalent per day, with operating costs of $330m and capital expenditure guidance unchanged at $260m.
"Our ability to unlock production from mature fields has been illustrated through the positive drilling campaign at Triton and well work on Bruce," said chief executive officer Chris Cox.
"With the successful results from the B-6 well on Bittern expected to be followed shortly by the Gannet GE-05 well, our key focus is now working to translate these results into more robust production performance than we have seen in recent months.
"The Autumn Budget has provided much needed clarity over future investment allowances."
Cox said the rest of the Triton well campaign would continue to benefit from full tax relief, while the retention of allowances opened up opportunities in the wider portfolio.
"Our subsurface team are continuing to work up options for the untapped potential around the Bruce Hub.
"Our portfolio is set to provide material cash generation going forward and we are confident of growing both organically and through acquisitions, delivering significant returns to shareholders."
At 1404 GMT, shares in Serica Energy were down 4.95% at 131.92p.
Reporting by Josh White for Sharecast.com.
