Serica Energy (SQZ) H1 2025 earnings summary

Executive summary

• H1 2025 production averaged 24,700 boepd, down over 40% year-over-year due to Triton FPSO downtime, but production rebounded in July and is expected to resume higher levels in H2 2025, demonstrating underlying business resilience.

• Five-well Triton drilling campaign completed 25 days ahead of schedule and $31 million under budget, with all wells meeting or exceeding expectations and already contributing to production.

• Cash position increased to $174 million, with strong liquidity of $433 million as of July 2025, supported by a $71 million tax refund and undrawn RBL facility.

• Interim dividend of 6p per share declared, consistent with the rebased, sustainable payout policy.

• Organic growth, disciplined M&A, and progressing major projects like Belinda and Kyle remain strategic priorities.

Financial highlights

• Revenue for H1 2025 was $305 million (or £305 million), down from $462 million in H1 2024, reflecting lower production volumes due to Triton outage.

• EBITDAX was $118 million, with operating profit of $118 million and a loss after tax of $43 million, impacted by a one-off $65 million deferred tax charge from the EPL extension.

• Net debt reduced to $57 million at June 30, with net debt to LTM EBITDAX ratio at 0.3x.

• Capex totaled $138 million in H1, mainly for the Triton drilling campaign and Belinda development.

• Free cash flow was $14 million, with operational free cash flow from Other Producing Assets reaching $35 million.

Outlook and guidance

• H2 2025 production and revenue expected to materially increase as Triton resumes full operations and new wells come online.

• FY 2025 production guidance set at 33,000–35,000 boepd; opex guidance unchanged at ~$330 million.

• Capex for 2025 expected at the top end of $220–250 million, with accelerated spend on Belinda.

• Belinda field first oil targeted for January 2026; Kyle project FID possible in H1 2026 with first oil in 2028.

• Dividend policy remains sustainable in the medium term, even as investment in new projects continues.