Serica merger28 Mar 2026 13:38
Putting Serica’s market cap of 1.1bn in contrast with EnQuest’s 350m, and comparing how the companies have performed operationally in recent years, is astonishing. Triton is still running on just one compressor and one power turbine. They still haven’t managed to resolve the issues that have been ongoing for nearly two years.
Most recently, they said it would be “few months before they can get two compressors up and running.” At the same time, several new wells that were expected to contribute to this year’s production growth—such as Belinda—won’t come online until Triton is fully operational again.
In their guidance, they stated that they expect Triton to be offline for one week every month throughout the year. Given that there have already been significant issues with the FPSO at the start of the year, and that Dana is planning 65 days of maintenance in Q3, Triton will need to start performing soon if their guidance is to hold.
Their 2025 was dreadful (given that Triton was mostly offline), and net debt increased significantly. I think the market has been very forgiving toward Serica given how poorly they have performed relative to their own guidance, and ultimately the Tailwind acquisition.
Their recent acquisitions look very good on paper, but I remain skeptical of their M&A strategy, as they executed many deals in a short period that felt quite rushed. Their organization is not set up for decommissioning, which I believe will become a major hidden cost for Serica going forward. On top of that, there is also uncertainty around the Rhum field and the U.S. sanctions that expire in March 2027.
Chris Cox mentioned that they are interested in continuing M&A, including internationally, specifically in Southeast Asia. EnQuest is already an established player in the region and has a clear growth strategy. I hope they don’t try to reopen discussions about a merger with Serica again. There is simply too much uncertainty around their actual production capacity.
If EnQuest manages to complete a larger acquisition in the UK (~20k boepd), I believe we could fairly quickly see a normalization in the valuation gap between the two companies.
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