Serica Energy PLC · LSE:SQZ
Serica Energy — Investor Presentation (January 2022)
25 slides from Serica Energy's investor presentation, Jan 20, 2022
Slide 1: Corporate Update
20 January 2022 Corporate Update
Slide 2: Disclaimer
Disclaimer • This document is personal to the recipient and has been issued by Serica Energy plc (the "Company"). This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor
Slide 3: Serica Energy is a nimble, dynamic and experienced company
Serica Energy is a nimble, dynamic and experienced company Serica is now one of the UK’s leading mid-tier independent oil and gas companies responsible for delivering, through the Bruce platform, over 5% of the UK’s gas production, a vital contribution to the country’s security of supply Key attribu
Slide 4: Strong progress during 2021
Increasing production due to successful investment projects Strong progress Increased net production from 18,900 boe/d in 1H to 25,500 boe/d in 2H rising to near 30,000 boe/d in December Gas now represents >85% of production during 2021 Successful delivery of increasing production levels and higher
Slide 5: 2021: A year of investment for immediate benefit and longer-term potential
2021: A year of investment for immediate benefit and longer-term potential Jan Feb Mar April May June July Aug Sept Oct Nov Dec Rhum R3 Rhum R3 Rig contracted well test first for 2022 production Eigg well Columbus Columbus Columbus development development first well spud well test production OFAC Di
Slide 6: Serica's financial strength facilitates investment for growth
Serica’s financial strength facilitates investment for growth • Serica has a strong balance sheet with significant cash, no borrowings and limited decommissioning liabilities • The Company’s investment strategies are being executed despite short-term commodity price fluctuations • In 2020/21 Serica
Slide 7: >85% gas: contribution to UK gas supply
Serica is making a significant contribution to UK gas supply, a vital part of the UK’s energy mix With the introduction of R3 and Columbus, Serica’s production is now >85% gas • Current UK government forecasts suggest that gas will remain a vital part of the UK’s energy mix as we move towards Net Ze
Slide 8: Contributing to domestic fuel supply
Serica’s production is a vital part of the UK’s energy mix Contributing to domestic fuel supply At any given time around 9,000* personnel are at work on energy industry installations in the UK's waters, providing the gas that will fuel UK homes, schools and hospitals Our industry supports almost 200
Slide 9: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) ESG performance linked to company remuneration Total flaring volumes 12,000 10,000 • Emissions, flaring and waste targets in 2021 staff bonus scheme 8,000 TONNES 6,000 • Flaring reduced by 53% compared to 2019 4,000 2,000 • Emissions 14% lower than 2019 0 2
Slide 10: 2021 production increases in H2
2021 production increases in H2 Serica net production (boe/d) • BKR production levels in the first half of 2021 were impacted by the planned shutdown of the Forties Pipeline System from late 30,000 May until late June • During this period valuable maintenance programmes were 25,000 carried out in or
Slide 11: 2020-21: A period of intense commodity price fluctuation
2020-21: A period of intense commodity price fluctuation • Average oil and gas prices were depressed during 2020 creating Heren NBP day-ahead gas prices (p/th) difficult trading conditions (Brent spot shown as comparison) • The recovery in gas prices since mid-2020 has been exceptional 300 280 • 202
Slide 12: Serica has a strong and growing cash position
Serica has a strong and growing cash position Cash, cash equivalents and hedging advances* / £ million 250 £218.4 million Cash, cash equivalents and hedging advances at 31 December 2021 (£102.7 million 30 June 2021) During 2021: 200 150 £81.3 million £55.0 million BKR acquisition liabilities paid Ne
Slide 13: Serica protects against low commodity prices with a prudent hedging policy
Serica protects against low commodity prices with a prudent hedging policy • Serica has a hedging policy to provide downside protection in case of low commodity prices • This policy allowed Serica to maintain its investment policy through the 2020 commodity price downturn Weighted average price Volu
Slide 14: Serica now benefitting from 100% of its share of BKR cash flows
The Bruce, Keith and Rhum (BKR) cashflow sharing mechanism has finished Serica now benefitting from 100% of its share of BKR cash flows • A major milestone for Serica was achieved on 31 December 2021 as the 2018 earn out deals with BP, Total E&P and BHP came to an end • These innovative acquisition
Slide 15: Investing in our Assets
Investing in our Assets Our investment strategy is to use technology and innovation to maximise the productive life of our assets while improving the environmental impact of our operations
Slide 16: The Erskine acquisition demonstrates how value can be added to mid-life assets
The Erskine (Serica 18%) acquisition demonstrates how value can be added to mid-life assets Potential to recover twice the reserves quoted at time of acquisition The Erskine field has already produced more oil and gas than the • The success of the Erskine acquisition demonstrates how 2P reserves ind
Slide 17: Rhum production boosted by successful R3 intervention
Rhum (Serica 50%) production boosted by successful R3 intervention Increasing average gross production from Investment in R3 delivers incremental production the Rhum field since R3 first production on 23 August 2021 • Rhum is a subsea gas development tied back to the Bruce platform complex, which li
Slide 18: First production from Serica operated Columbus development
First production from Serica operated Columbus (Serica 50%) development A Serica-led project from discovery to production System uptime has been good and despite the initial restriction to full • Serica is 50% owner and Operator of the Columbus Development which consists of a single capacity, Serica
Slide 19: Bruce & Keith Light Well Intervention Vessel campaign
Bruce & Keith Light Well Intervention Vessel campaign A new campaign to add reserves and prolong production from Multi-disciplinary team in place working with industry-leading service providers Bruce and Keith subsea wells on planning and procurement to allow • The scope of the campaign will be prod
Slide 20: North Eigg well to be drilled in 2022
North Eigg (Serica 100%) well to be drilled in 2022 An infrastructure led exploration project – North Eigg Unrisked Prospective Resources to be drilled this year (Recoverable) Serica Internal Estimates • The North Eigg exploration prospect is estimated to contain 60mmboe (P50) Dry Gas Condensate and
Slide 21: Business development focus on opportunities to spread risk and enhance production
Serica’s business development focus is on opportunities to spread risk and enhance production • The UKCS presents a wide range of merger and acquisition • REGIONAL FOCUS: The search for new opportunities is focused primarily on the UK Central & Northern North Sea opportunities where our operating ex
Slide 22: Well positioned for the future
Serica is in a strong position and looking to grow further Well positioned Production > 85% gas • Investing to provide essential low carbon energy for the UK market for the future • Benefitting from sustained high wholesale gas prices • Reducing the country’s reliance on higher emission hydrocarbon
Slide 23: Our Board
Our Board Tony Craven Walker Mitch Flegg Andy Bell Executive Chairman Chief Executive Chief Financial Officer Kate Coppinger Trevor Garlick David Latin Richard Rose Ian Vann Malcolm Webb Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Directo
Slide 24: Major shareholders
Major shareholders Number of Shares % of issued Share Capital Mr D Hardy & Mrs D Hardy 28,585,036 10.63% AXA Framlington Investment Managers 28,561,605 10.62% Canaccord Genuity Wealth Management (Inst) 20,357,494 7.57% Hargreaves Lansdown, stockbrokers (EO) 13,804,646 5.13% BP Exploration Operating
Slide 25: For further information visit
For further information visit Website www.serica-energy.com Email [email protected] Linkedin linkedin.com/company/serica-energy-plc