UK offshore oil and gas producer Serica Energy anticipates a major production increase this year as it ramps up drilling and well work.
The AIM-listed independent has increased its production guidance to between 41,000 and 48,000 barrels of oil equivalent per day, up from last year’s 40,000 boepd, with a drilling programme set to start at the Triton area next month.
The campaign consists of four wells and is expected to contribute additional production in the second half of 2024.
An extensive intervention programme is also planned for platform and subsea wells at the Bruce and Keith fields during 2024 to re-establish consistent production from Keith.
Plans for drilling two Bruce infill wells are also under way, marking the first new wells on the field since 2012.
Additionally, Serica will participate in the Parkmead-operated Skerryvore exploration well in the UK central North Sea.
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Despite industry-wide inflation, Serica in 2023 maintained operating costs at US$19 per boe, and aims to keep unit operating costs below US$20 per boe throughout this year, according to chief executive Mitch Flegg, who is due to step down after the publication of the company’s 2023 full-year financial results.
Serica announced Flegg’s planned departure last week, adding that chairman David Latin will take on the role of interim chief executive until a long-term successor is appointed.
Serica’s portfolio includes potential new projects in the UK’s offshore arena, notably the development possibilities for the Buchan and Belinda fields.
These projects offer prospects for reserves replacement and incremental production starting in 2026.
As a UK taxpayer, Serica will benefit from tax relief for its share of the associated development and exploration costs.
As of year-end, Serica reported cash and cash equivalents of £291 million ($367 million) and borrowings of £210 million. The balance sheet reflects prudent financial management, including payments for taxes and dividends during the second half of 2023.
The estimated cost for the currently approved capital investment in producing assets is approximately £210 million, with most expenditures expected in 2024.