Serica Energy plans bond issue as output rises and debt falls

(Alliance News) - Serica Energy PLC on Friday said it plans to hold investor meetings ahead of a potential five-year senior unsecured bond issuance, as it reported stronger production and a reduced debt position.

The London-based oil and gas producer in the UK's North Sea said it is considering issuing a new bond to diversify its funding sources and enhance financial flexibility, subject to market conditions.

Serica said proceeds from any issuance would be used to fully repay its existing reserve-based lending drawn debt, while keeping the facility in place to support future investment opportunities.

As of Thursday, Serica had cash of USD153 million and net debt of USD78 million, reduced from USD200 million at December 31. The improvement was supported by a USD56 million receipt from TotalEnergies SE following completion of the acquisition of a 40% stake in the Greater Laggan area in March.

Operationally, Serica reported a strong start to the second quarter. Average production has risen to 49,100 barrels of oil equivalent per day so far in the second quarter, up from 39,100 boepd in the first quarter ended on March 31.

The company attributed the increase to improved performance at the Triton hub and additional output from the Greater Laggan area.

Serica maintained its full-year production guidance, continuing to expect output of "significantly over 40,000 boepd" in 2026.

Chief Executive Officer Chris Cox said the company is seeking to "proactively optimise our capital structure through diversifying our sources of funding and enhancing our capital allocation optionality".

He added this would position Serica to capitalise on a range of investment opportunities following the expansion of its portfolio.

The firm said it will host a capital markets day on June 2, where it plans to outline its organic growth strategy, including short-cycle drilling and tieback projects, alongside its capital allocation framework.

Serica has appointed DNB Carnegie, part of DNB Bank ASA, and Pareto Securities as joint bookrunners, with SB1 Markets AS acting as co-lead manager, to arrange investor meetings starting Monday.

Shares in Serica were up 3.7% at 281.42 pence in London on Friday morning.

By Eva Castanedo, Alliance News reporter

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