Serica Energy reports 'solid' production as it exits Namibia

The AIM-traded firm said a “significant” strengthening in gas prices also had an impact on its 80% gas production portfolio, adding that it also reached the milestone of its longest period without a recordable injury since March 2016.

It said work on the Rhum R3 intervention project was continuing, following delays due to poor weather and equipment repairs, as the company was also formally awarded four new blocks in the UK 32nd licensing round.

Serica also noted its decision to withdraw from Namibia to focus on its North Sea portfolio, and other opportunities.

“We are pleased with the performance of our offshore production operations over the past three months, which have also benefited from the significant strengthening of gas prices during that period,” said chief executive officer Mitch Flegg.

“The delays to the Rhum R3 intervention project are frustrating, but do not affect its viability or long-term value.

“We are not prepared to take shortcuts, despite the slower than hoped progress, as we remain fully committed to a safe execution of the originally planned work scope.”

Flegg said an update would be given once rig operations were completed.

“Serica is committed to protecting and increasing shareholder value against the current backdrop of lower oil prices and slowing industry commitment to deep-water exploration.

“We have therefore decided that the expense of maintaining the Namibian licence will be better redirected to lower-risk, nearer-term opportunities to build on our North Sea portfolio where we are currently engaged in an exciting period of value-adding operations.”

At 1221 GMT, shares in Serica Energy were up 0.78% at 103.8p.