Serica Energy (SQZ) H2 2025 earnings summary

Executive summary

• Achieved significant portfolio diversification and growth through five acquisitions in 2025, more than doubling the number of producing fields and increasing 2P reserves by 19%.

• Production for 2025 averaged 27,600 boepd, with guidance for 2026 set to exceed 40,000 boepd and potential to surpass 65,000 boepd post-acquisition completion.

• Dividends maintained at 16p/share in 2025, with a 10p final dividend proposed, reflecting a focus on shareholder returns.

• Integration of new assets and organizational strengthening are underway to support growth.

• Plans to move to the main market of the London Stock Exchange in Q3 2026.

Financial highlights

• Revenue for 2025 was $601 million, down 20% year-over-year due to lower production and unscheduled downtime at Triton, which reduced revenue by $250 million.

• Profit before tax was $80 million, half the prior year; loss after tax was $52 million, impacted by a $130 million deferred tax charge including $65 million from the Energy Profits Levy extension.

• Net debt at year-end was $200 million (1.0x EBITDAX), more than halved post-year-end and on track for net cash by end of H1, with available liquidity supported by an undrawn $259 million RBL facility.

• $63 million tax rebate received for overpaid 2024 taxes; low cash tax bill in 2025.

• Operating cash flow after tax was $180 million; total capex and abex reached $250 million.

Outlook and guidance

• 2026 production guidance remains unchanged, with expectations to average significantly over 40,000 boepd and potential to reach 65,000 boepd by year-end.

• Forecast operating expenditure for 2026 is $380-400 million, with capex guidance of $175-195 million, focused on asset life extension and growth projects.

• Guidance for production, OpEx, and CapEx reiterated at January trading statement levels.

• Significant free cash flow generation expected in 2026, supported by new assets and market conditions.

• Capital Markets Day in early June will provide more detail on investment opportunities and capital allocation.