(Alliance News) - Serica Energy PLC on Wednesday said its full-year earnings were hurt by a drop in natural gas prices, and also announced the launch of a share buyback programme.
The independent upstream oil and gas company with operations in the UK North Sea said revenue fell 22% to GBP632.6 million in 2023 from GBP812.4 million a year earlier. This was largely due to lower natural gas prices, Serica explained.
Pretax profit plummeted 37% to GBP305.6 million from GBP488.2 million as a result.
In addition, exploration and pre-licence costs jumped to GBP2.1 million from GBP185,000 the year before, and administrative expenses doubled to GBP19.6 million from GBP9.2 million a year ago. Transaction costs were also higher, at GBP10.1 million, multiplied from 1.8 million.
Serica Energy maintained its final dividend of 14 pence per share, bringing its total dividend to 23p from 22p in 2022.
Further, the company said it has begun a GBP15 million share buyback. "This reflects the confidence of the board in the company's current financial position, the cash generating capacity of the portfolio during 2024 and the long-term value of the assets," the company said.
Outgoing Chief Executive Officer Mitch Flegg said: "The completion of the Tailwind acquisition in March 2023 represented a step change in the scale and diversity of Serica's portfolio. The merits of seeking diversity and organic growth opportunities through the transaction have been borne out by the sharp decline in gas prices relative to oil prices during 2023 and Serica maintaining its track record of more than replacing production through reserves additions in both the Bruce and Triton production hubs. Moreover, there are further growth opportunities within the company's existing producing fields and other assets in Serica's portfolio, such as the potential Buchan Horst project."
In February, it was announced CEO Flegg would step down from his role after Serica's annual results were published, following a six-year tenure. He will remain as an advisor until after the next annual general meeting, which Serica expects to convene in June this year. Chair David Latin will take over as interim CEO until the company appoints a long-term successor.
Shares in Serica were up 1.2% at 196.10 pence each in London on Wednesday morning.
By Sabrina Penty, Alliance News reporter
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Serica Energy (SQZ)