Serica Energy (SQZ) H1 2026 earnings summary

Executive summary

• Achieved strong operational and financial performance in H1 2026, with production up 81% year-over-year to 44,700 boepd and Q2 production exceeding 50,000 boepd, driven by improved uptime and new asset contributions, notably from Triton and West of Shetland.

• Revenue more than doubled to $677 million, with EBITDAX up 154% to $301 million and post-tax CFFO up 62% to $280 million compared to H1 2025.

• Transitioned from net debt of $200 million at end-2025 to net cash of $26 million by 30 June 2026, supported by $184 million in free cash flow and successful refinancing activities.

• Completed strategic acquisitions, including GLA, Catcher, Golden Eagle, and announced the recommended acquisition of Pharos Energy, marking the first step in international expansion.

Financial highlights

• H1 2026 revenue reached $677 million, more than double H1 2025, driven by higher production and realized prices ($93/bbl oil, 101p/therm gas pre-hedging).

• Post-tax CFFO for H1 2026 was $280 million, up from $173 million in H1 2025; free cash flow of $184 million generated.

• Operating and lifting costs were $247 million (~$30/boe); ex-Lancaster opex at $25/boe.

• Interim dividend of 6p/share declared, maintaining a 15–30% payout ratio policy.

Outlook and guidance

• On track to deliver production rates of ~65,000 boepd post-Spirit Energy acquisition, with 2026 guidance revised to above 40,000 boepd.

• Post-tax CFFO guidance for 2026 is $450–$475 million.

• Capital expenditure guidance unchanged at $175–195 million; opex guidance $380–400 million (excluding $65 million Lancaster spend).

• Rig contract for high-impact drilling expected soon, with drilling to start in Q3 2027.

• Move to Main Market of the London Stock Exchange remains on track for 2026.