Serica Energy boasts "excellent" first half financial performance

For the six months ended 30 June, the oil and gas explorer posted a jump in gross profits from $2.6m one year ago to $13.6m.

That improvement fed straight into its bottom line, with profit after tax increasing from $2.8m to $10.3m.

Similarly, sales grew from $5.7m to $21.9m with an average realised price of $51.5 per barrel, up from $36.6 per barrel for the comparable period of 2016.

At period-end, cash and short-term deposits had improved to $30.7m with zero debt.

In particular, the company boasted that the Erskine field, its only current source of production, located in a gas and condensate field in the UK Central North Sea, "continues to perform well" with production there "averaging 3,100 boepd net to Serica" to the end of May and "2,800 boepd net for the full half".

However, the company admitted that thus far production in the second half had "been reduced to resolve various pipeline and maintenance issues."

Despite those issues, management stuck by its full-year production guidance from Erskine for between 2,200 to 2,400 barrels of oil equivalent per day net.

Furthermore, higher prices for oil during the winter were expected to provide a favourable tailwind.

"We are now entering the winter months in the northern hemisphere, when hydrocarbon prices are traditionally stronger and this helps to underpin our financial performance."

Management added that the company retained a strong "financial position" and was well placed to take advantage of new opportunities.

"The Company is strongly financed with material and growing cash resources currently standing at over US$32 million, a solid and robust income stream from Erskine production, low corporate overheads, production costs around US$15 per boe and material upside potential."