Serica Energy (SQZ) Trading update summary

Strategic and Operational Highlights

• Multiple M&A deals completed or pending, boosting reserves by over 25% and diversifying the asset base to more than double the number of producing fields by year-end 2026.

• Portfolio now spans from West of Shetland to the Southern North Sea, with producing fields set to more than double and a shift to a more gas-weighted (60/40) mix post-acquisitions.

• Enhanced organizational capability with a strengthened executive team and improved processes.

• Ongoing focus on organic growth and high-grading investment opportunities, with a comprehensive update and Capital Markets Day planned for spring 2026.

• Commitment to move to Main Market listing after results are published.

Production and Operational Performance

• 2026 production forecast to rise materially from 27,600 boepd in 2025 to significantly over 40,000 boepd, with potential to exceed 65,000 boepd post-acquisitions.

• Current production rates have rebounded to around 50,000 boepd, with Bruce Hub at 20,000 boepd and Triton at 21,000 boepd after repairs and upgrades.

• 2025 production was impacted by reliability issues at Triton, resulting in a 4.5 million boe shortfall and $300 million in deferred revenue.

• Maintenance and upgrades at Triton and Bruce to improve uptime and extend asset life, with infill drilling at Bruce planned for the first time since 2012 and a 24-day shutdown in Q3 2026.

• Lancaster field producing 6,000 boepd, expected to cease in Q2 2026 as FPSO leaves the field.

Financial Performance and Guidance

• 2025 saw net debt at $200 million, healthy liquidity of $290 million, and CapEx of $250 million in line with guidance.

• 2025 revenue was $601 million, with negative free cash flow of $22 million and undrawn RBL of $259 million.

• 2026 OpEx expected to rise to $380–400 million due to asset additions, with $65 million related to Lancaster cessation; base CapEx for 2026 set at $125–145 million, focused on Bruce and Triton.

• Hedge portfolio valued at $30 million, covering 12,300 boepd in 2026 and 7,100 boepd in 2027, with effective floors of $60/bbl for oil and 67p/therm for gas.

• Net debt expected to decrease markedly in 2026 as cash generation improves and M&A completions bring in cash.