North Sea oil and gas firm is keen to expand

NORTH Sea-focused Serica Energy is still on the hunt for acquisitions in the area despite seeing profits plunge in the latest year.

Serica made £12.5 million profit before tax last year compared with £108.8m in 2019, after feeling the impact of the fall in oil and gas prices triggered by the pandemic and a setback on a key field.

The company stopped production from the

Bruce, Keith and Rhum (BKR) fields for 45 days to complete repairs on the related production facility.

However, that does not appear to have dented directors’ confidence in a strategy that has involved Serica buying North Sea assets that bigger fish have lost interest in.

The company managed to generate plenty of cash last year helped by the fact it produces oil and gas relatively cheaply in the North Sea.

With £89m cash at December 31, it started the latest year in a good position to capitalise on opportunities that may crop up in the North Sea.

The downturn in the area triggered by the coronavirus crisis has prompted some firms to look to sell assets, adding fresh impetus to a shake-up that has been under way for some time.

Serica acquired interests in the BKR fields from BP and other heavyweights.

Chief executive Mitch Flegg said it is making good progress with projects that are expected to help it increase production this year. These involve the company investing in assets it has acquired.

“We continue to actively pursue M&A opportunities that can broaden our asset base and add further value for our stakeholders,” said Mr Flegg. Serica plans to pay a 3.5p per share dividend for 2020, up from 3p last time.