Serica Energy PLC

Latest Results (21.08.2026):

Serica Energy PLC — results for Q2 2026 and H1 2026 (six months ended 30 June 2026): Serica reported a strong first half of 2026 with production up to 44,700 boepd (Q2 average 50,200 boepd), revenue of $677m, EBITDAX of $301m and free cash flow of $184m. Operational improvements (notably at Triton) plus new West of Shetland production and higher commodity prices drove cash generation and a move from net debt at year-end 2025 to adjusted net cash of $26m at 30 June 2026. The group issued a $300m five‑year Nordic bond, refinanced RBL facilities to $750m (six‑year), declared a 6p interim dividend and announced further organic drilling and M&A activity including the completed GLA acquisition and the recommended Pharos Energy acquisition.

Production

H1 2026 production averaged 44,700 boepd (H1 2025: 24,700 boepd); Q2 2026 averaged 50,200 boepd. Triton performance recovered strongly (Q2 contribution 20,300 boepd, >95% uptime). West of Shetland (GLA) added material volumes after the 26 March completion.

Revenue and profitability

Revenue was $677m (H1 2025: $305m) and EBITDAX $301m (H1 2025: $118m). Reported accounting was impacted by $111m of unrealised hedging losses and $96m goodwill expense, producing a loss before tax of $75.6m but a small profit after tax of $6.1m due to a $141.6m deferred tax credit.

Cash generation and balance sheet

H1 generated $184m free cash flow; cash and restricted cash at 30 June 2026 were $326m. Adjusted net cash was $26m (versus adjusted net debt of $200m at 31 Dec 2025).

Financing and liquidity

Serica issued a $300m Nordic bond in May 2026 and post-period completed a $750m six‑year RBL on 23 July 2026; pro forma liquidity cited at $784m. These facilities provide capital headroom for organic investment, decommissioning security and M&A.

Capital allocation & dividend

Interim dividend of 6p declared (payable 19 Nov 2026; ex‑div 22 Oct). The company introduced a FY‑2026 dividend policy targeting 15–30% of post‑tax CFFO. H1 capex was $81m; full‑year capex guidance remains $175–195m.

Growth, drilling and M&A

Serica expects to contract a rig imminently for a ~400‑day programme (option to extend; up to six wells). Drilling expected to start with Bruce SCE/SCW in Q3 2027 with potential first production ~12 months after start. Completed acquisition of 40% GLA (26 Mar 2026); recommended acquisition of Pharos Energy announced post‑period as first step in planned international expansion. Spirit Energy asset acquisition now expected to complete 1 Oct 2026.

Guidance and outlook

2026 production guidance revised to above 40,000 boepd (previously "significantly above 40,000") reflecting Spirit timing; Serica remains on track to reach ~65,000 boepd after Spirit completion. Opex guidance $380–400m (excluding $65m Lancaster spend); post‑tax CFFO guidance revised to $450–475m reflecting later Spirit completion.

Key accounting/market risks highlighted

H1 was affected by large mark‑to‑market movements on hedges (net derivative liability $80.6m at 30 June) and sizeable non‑cash goodwill adjustments. Hedging protects downside but limits near‑term upside; commodity and geopolitical volatility remain principal external risks.