Serica Energy enjoyed an “outstanding year” in 2021 as gross profits surged to £386.8 million, reversing £2.9m losses the prior year, amid a huge bump to commodity prices.
The North Sea operator has released its full year results for 2021, “illustrating the substantial changes” of the year.
Revenues jumped from £125.6m in 2020 to £514.1m, while pre-tax profits totalled £135.1m, up from £12.5m the prior period.
The jump in performance comes despite a drop in production to 22,200 barrels of oil equivalent per day, down from 23,800 boepd, due to an extended maintenance shutdown.
During the year, the firm started up a the Rhum R3 well and the Columbus field in August and November respectively, and the firm’s overall reserves (2P) have increased to 62.2m boe, up from 61m.
Looking ahead to 2022, Serica plans to drill an exploration well at the North Eigg prospect “in early Q3 2022” using the Transocean Paul B. Loyd Jr. rig.
North Eigg has estimated mid-case recoverable resources of 60 million boe, if a discovery is made.
CEO Mitch Flegg said: “2021 was an outstanding year of progress for Serica, which demonstrated the value of our through-cycle investment strategy resulting in the R3 and Columbus projects reaching first production. This increases Serica’s gas output to over 85% of our total production, further increasing our contribution to the provision of vital lower carbon gas to the UK’s energy market.
“We will continue to pursue our investment-led strategy this year with a planned well intervention programme on the Bruce, Keith and Rhum fields (“BKR”) in addition to our exploration well at North Eigg. As always, we continue to look for acquisition opportunities that fit our criteria and will add value for our stakeholders.”
The year also saw production-sharing agreements with BP, TotalEnergies and BHP come to an end, with the firm now benefiting from 100% of output from the Bruce, Keith and Rhum fields.
Chairman Tony Craven Walker said Serica has been on a “remarkable transformation” in recent years and said it has an “important role to play” as a British firm operating major facilities in the North Sea.
“The tragic events in Europe now taking place have underscored the importance of our own domestic resources.
“I am hopeful that, with the recent publication of the British Energy Security Strategy, government policy imbalances will now be corrected and that companies like Serica will be given the encouragement needed to continue the investment required to optimise the value and benefit of existing domestic resources whilst the development of new energy sources continues.”