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Serica Energy PLC on Thursday heralded a good start to 2024, maintaining annual guidance, though it criticised the extension of the energy profits levy announced in the UK government budget on Wednesday. Serica is an independent upstream oil and gas company with operations in the UK North Sea. At December 31, net proved plus probable reserves came to 140 million barrels of oil equivalent, up from 130 million barrels a year prior. Overall 2P reserves additions came to 24 million barrels during 2023. In particular, Serica noted an ‘even split’ of oil and gas reserves, with over 90% of the 2P reserves recorded in fields that are already in production. Since the year’s end, average net production in January and February has been 45,500 barrels of oil equivalent per day. Chief Executive Mitch Flegg was positive about Serica’s start to the year, noting that production thus far has been ‘encouraging’. He added that the firm is ‘on track’ to start planned well intervention and drilling activities on the Bruce and Triton assets during the coming month. Production guidance for 2024 is still for between 41,000 to 48,000 barrels per day. Also on Thursday, Serica expressed its ‘considerable disappointment’ at the UK government’s decision to extend the energy windfall tax by one year, as announced by Chancellor Jeremy Hunt on Wednesday. ‘The kind of approach exhibited in the budget will lead to more imports and reduce the ability of our industry to enhance the UK’s resilience to potential energy shocks in the future,’ said Flegg. The energy profits levy was due to end in March 2028, but will now end in 2029. Explaining the decision, Hunt said: ‘Because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits - so I will extend the sunset on the energy profits levy for an additional year to 2029, raising £1.5 billion.’ Serica Energy shares were trading 3.6% higher at 178.10 pence each in London on Thursday morning. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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