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    UK's Serica sees profits soar 88-fold in H1 on increased output, prices

Summary

The company gained from soaring UK gas prices and a 41% growth in production.

by: NGW

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UK's Serica sees profits soar 88-fold in H1 on increased output, prices

UK gas producer Serica Energy achieved an 88-fold increase in profit in the first half of the year, on the back of soaring prices and production growth, it said on September 27.

Pre-tax profits soared to £194.5mn ($210mn) in the six-month period, up from only £2.2mn in the same period last year. Operating cash flow grew to £312mn, from £72.8mn, while post-tax income climbed to £116.7mn, from only £1.2mn.

Serica has gained significantly from soaring gas prices in the UK this year, as 85% of its production is gas. The average price it sold its gas at in the first half was £1.36/therm, versus £0.50/therm in the same period last year.

The company also managed a 41% year/year growth in its output in the first half of 2022 to 26,600 barrels of oil equivalent/day, citing the impact of its ongoing capital expenditure campaign.

Serica's main assets are the Bruce, Keith and Rhum gas fields in the north UK North Sea, and the Columbus and Erskine deposits in the central North Sea. Columbus was brought on stream in November last year. Two months earlier it also launched a third well at Rhum, drilled in 2005 but never put into production. 

This year the company also undertook interventions at Rhum's first and second wells, boosting their flow from 4oo to 1,800 boe/d and 450 to 2,400 boe/d respectively. Looking forward, it expects to produce an average of between 26,000-28,000 boe/d from its assets for the full year.

Serica expects results from an exploration well at the Erskine deposit in December, plans to perform similar interventions at Bruce and Keith wells in 2023.