Serica Energy Plc (AIM: SQZ): Triton back on stream. Compressor vulnerability to be fixed in 1Q25.
• Triton production resumed on 27 December 2024 following a shut-down of about three weeks, within the guidance of two to four weeks.• There was brief period of unscheduled downtime at Bruce due to a subsea intervention associated with the Rhum field. Production at Bruce has now resumed. Total FY24 production was 34.6 mboe/d including 25.1 mboe/d in 4Q24. 4Q24 production of 7.3 mboe/d at the “other assets” was particularly high given the contribution from Erskine that restarted production at the end of August.
• Current total net production stands at 46.4 mboe/d and is expected to increase further with the phased production ramp-up at Triton, including new output from the Gannet GE-05 well (Serica WI: 100%). Back in early October 2024, overall production had already reached 50 mboe/d, excluding the GE-05 well.
• We currently estimate additional net production of 3 mboe/d from the GE-05 well, though this may be conservative. The recent B6 well had a net IP rate of over 5 mboe/d (~8 mboe/d gross) when brought online.
• Drilling at the EC1 well on the Guillemot North West field (Serica WI: 10%) has been completed, with production expected to commence in 1Q25. We anticipate it will add 300 boe/d net to Serica.
• The second compressor at Triton continues to be expected to be repaired in 1Q25. This is crucial as it will provide redundancy and address operational vulnerabilities at Triton.
• We re-iterate our target price of £3.00 per share.
Valuation
As we incorporate the FY24 actual production in our forecasts, our Core (2P) NAV is now £2.50 per share with a ReNAV of £2.96 per share.
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.
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.
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