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(Alliance News) - Serica Energy PLC is planning to declare a maiden dividend in April, it said Tuesday, after a year of "strong" performance.
Shares were 7.2% higher on Tuesday morning in London at a price of 131.40 pence each.
Serica is the operator of the Bruce, Keith, and Rhum fields in the UK North Sea, holding 98% of Bruce, all of Keith, and 50% of Rhum. The assets were bought off oil major BP PLC and mining giant BHP Group PLC in 2018.
Aberdeen-based Serica had previously indicated a plan to start returning cash to shareholders via dividends, and on Tuesday confirmed this will happen for the first time when announced 2019 financial results in April. It did not give any details as to the size of the return.
On the operational front, Serica's BKR fields, together with Erskine also in the North Sea, delivered 30,000 barrels of oil equivalent per day in 2019, 13% higher on a like-for-like basis than 2018. This result is towards the top end of guidance, Serica noted.
Some 80% of Serica's production comes in the form of natural gas. Costs fell 28% to USD13 per barrel of oil equivalent, Serica added.
The company now has no borrowings, it noted, and as of December 31 had cash, cash equivalents, and term deposits of GBP101.8 million, more than double the figure the year before.
Chief Executive Mitch Flegg commented: "2019 has been a year of strong performance and achievement for Serica. We have established our position as a leading UK independent producer and we entered 2020 with no borrowings, low decommissioning liabilities and in a strong cash position.
"Operationally 2020 will bring new opportunities. We will strive to continue to improve our operating performance alongside planning and executing our three high-impact capital projects. The fact that we will operate production, development and exploration projects demonstrates the diversity in our portfolio."
Flegg continued: "With these opportunities, our balance sheet strength and our first-class operating team, we are exceptionally well-positioned to deliver sustainable value to all of our stakeholders through the successful implementation of our twin-track strategy of finding new growth opportunities whilst maximising production and minimising costs."
By George Collard; georgecollard@alliancenews.com
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