Serica maintains upbeat guidance, unveils new dividend policy

(Alliance News) - Serica Energy PLC on Tuesday, ahead of its capital markets day, hailed an "exciting time" for its portfolio and forecast continued production growth over the next decade.

Shares in Serica were 4.5% higher at 271.60 pence in London on Tuesday.

The London-based, UK North Sea-focused oil and gas producer said it will focus on its portfolio of short-cycle projects, which have the potential to add 30,000 barrels of oil equivalent per day of incremental production.

It said this supports annual average production of over 50,000 boepd into the next ten years.

Serica said its current production is robust, with production averaging 49,500 boepd for the second quarter and 43,300 boepd for the year to date.

It said it has cash of USD228 million and a net debt position of USD72 million as of June 1, and remains on track to be net cash at the end of June, with a liquidity position of USD684 million.

Serica also announced that its dividend policy, from 2026 onwards, will target a dividend payout of 15% to 30% of post-tax cash flow from operations.

"This range is consistent with the level of Serica's historic shareholder distributions and is expected to support a continuation of the current 16p per share annual dividend, with potential for additional shareholder returns," it said. The new policy will not apply to the 10p per share final dividend for 2025.

For 2026, Serica expects post-tax CFFO between USD470 million and USD520 million.

It said all guidance for the year remains unchanged, including its expectation that production will "significantly" exceed 40,000 boepd. Additionally, the company is on track to move from AIM to the Main Market of the London Stock Exchange in the third quarter.

"This is an exciting time for Serica," commented Chief Executive Officer Chris Cox. "We have a multitude of opportunities in our newly expanded, well-balanced, portfolio set to deliver material cash generation that funds further value-accretive growth alongside sustainable shareholder returns into the next decade.

"Underpinned by a strong balance sheet and bolstered liquidity, we will share more details today about these growth projects and how we expect to deliver them. Our disciplined approach to capital allocation and value-accretive M&A means Serica is well positioned to continue its track record of creating long-term shareholder value."

By Emma Curzon, Alliance News reporter

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