Report
Stephane Foucaud

Serica Energy Plc (AIM: SQZ): 25 mboe/d net production at Triton

• Triton production has ramped to over 25,000 boed net to Serica. This elevated level of output could be sustained until the commencement of the Bittern pipework in November.
• The pace of ramp-up has exceeded forecasts. For 4Q25, we currently model average production at Triton of approximately 7 mboe/d net to Serica. Our FY25 corporate production estimate stands at ~27.5 mboe/d.
• Serica remains well-positioned for inorganic growth, supported by a robust balance sheet and substantial tax loss carryforwards. The recent decline in oil prices may unlock further acquisition opportunities. A confirmed acquisition of bp’s interests in Culzean—assuming TotalEnergies and NEO NEXT do not exercise their pre-emption rights by 12 November 2025—would be transformational for Serica. Notably, our valuation does not yet reflect any contribution from this potential transaction.
• We maintain our target price of £3.05 per share. Based on the current share price, we project a FY25 dividend yield of approximately 9%.

Resilient to lower oil price
Our Core NAV and ReNAV remain unchanged at £2.80 and £3.05 per share, respectively. These valuations are based on Brent crude assumptions of US$69.5/bbl for 2025, US$68.8/bbl for 2026, and US$70/bbl thereafter (with no escalation), alongside NBP gas price assumptions of approximately £0.90/therm for 2025 and £0.82/therm from 2026 onward.

Under a more conservative scenario—assuming Brent averages US$60/bbl from Q4 2025 onward—our Core NAV and ReNAV would adjust to £2.35 and £2.44 per share, respectively. In this case, we project net cash of ~US$137 mm at YE26, US$350 mm at YE27, and US$520 mm at YE28. These forecasts exclude exploration capex and any future acquisitions, and assume that the proposed acquisition of bp’s interests in Culzean does not proceed. Regular dividend payments, consistent with FY25 levels, have been netted-off from the net cash calculations.

Cumulatively, free cash flow over the 2026–2028 period under this conservative pricing scenario is estimated at ~US$900 mm—nearly equivalent to the company’s current market capitalization.
Underlying
Serica Energy

Serica Energy is an independent oil and gas company with production, development and exploration licence interests in the U.K. Continental Shelf and exploration interests in Ireland, Morocco and Namibia. As of Dec 31 2016, Co. had proved plus probable reserves of 3.8 million barrels of oil equivalent, which consisted of 2.1 million barrels of oil and 10.40 billion cubic feet of gas.

Provider
Auctus Advisors
Auctus Advisors

Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.

The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.

Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.

Auctus provides Corporate Broking, Equity Research and Investment Banking services. 

Analysts
Stephane Foucaud

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