Serica Energy’s 2025 results: tougher year operationally, bigger year strategically
Serica Energy has reported audited results for the year to 31 December 2025. It was a mixed year: lower production because of extended downtime on the Triton FPSO, but significant strategic progress through a string of acquisitions and a stronger platform for growth. Management says production is set to exceed 65,000 boepd by the end of 2026 once all deals complete, with portfolio diversification and the Shetland Gas Plant now squarely in Serica’s toolkit.
Here is what stood out and what it means for retail investors.
Key 2025 numbers and dividend
| Metric | 2025 | 2024 |
|---|---|---|
| Average production (boepd) | 27,600 | 34,600 |
| Average realised Brent oil price | $67/bbl | $75/bbl |
| Average realised gas price | 84p/therm | 76p/therm |
| Revenue | $601 million | $727 million |
| EBITDAX | $210 million | $379 million |
| Profit before tax | $80 million | $160 million |
| (Loss)/profit after tax | $(52) million | $92 million |
| Capital expenditure | $250 million | $278 million |
| Free cash flow | $(24) million | $(1) million |
| Cash and restricted cash | $31 million | $148 million |
| Total debt | $231 million | $231 million |
| Net (debt)/cash | $(200) million | $(83) million |
| Final dividend declared | 10p per share | 10p per share |
The loss after tax is driven by a $130 million deferred tax charge, including a one-off non-cash $65 million hit from extending the UK Energy Profits Levy to 2030. Serica still declared a 10p final dividend, payable on 24 July 2026 (subject to AGM approval).
Production reset now under way
Production averaged 27,600 boepd in 2025 due to unscheduled work on the Triton FPSO. The good news is that output has picked up in 2026: year to date production is 38,600 boepd, and since Triton came back on 9 March, portfolio production has averaged over 50,000 boepd.
- Triton Hub averaged 5,900 boepd in 2025. The operator forecasts a planned shutdown of about 65 days in Q3 2026 as part of its reliability push.
- Bruce Hub averaged 16,100 boepd. A shorter planned shutdown of around 24 days is expected in Q3 2026, with work focused on reliability and setting up for a Bruce infill drilling campaign targeted to start in 2027.
- Lancaster, acquired in December, has been producing around 6,000 boepd but is expected to cease in May 2026 following notice on the Aoka Mizu FPSO.
Subsurface work continues to deliver. The five-well Triton programme at Evelyn and Belinda hit its targets, and the Kyla redevelopment matured 10.2 mmboe from resources to reserves via a simple single-well tie-back to Triton.
Acquisitions are the growth engine
Serica announced four cash-generative acquisitions in 2025 at an attractive combined valuation of $3.3 per boe of 2P reserves. The standout is the completed purchase of a 40% interest in the Greater Laggan Area, plus operatorship of the Shetland Gas Plant. Serica actually received a net completion payment of $56 million on closing. The GLA adds just over 5,000 boepd net today and offers growth via the Glendronach tie-back and Tormore infills, while the gas plant provides strategic infrastructure leverage.
Once the Catcher, Golden Eagle Area Development and Spirit Energy assets all complete through 2026, the number of producing fields in the portfolio more than doubles. That matters because it takes Serica away from reliance on a couple of hubs and should smooth cash flows.
Reserves, resources and the path to 65,000 boepd
At year end, 2P reserves stood at 116.8 mmboe, broadly split between oil and gas. On a pro forma basis including pending acquisitions, 2P climbs 19% to 138.5 mmboe, 54% gas weighted. 2C resources rose 16% to 103.4 mmboe, or 112.6 mmboe pro forma, boosted by Glendronach and Bruce infill targets.
Guidance for 2026 is unchanged at significantly over 40,000 boepd, with capacity to exceed 65,000 boepd towards the end of the year as all deals complete and operational performance beds in.
Balance sheet, tax and hedging
Serica ended 2025 with $31 million of cash and restricted cash and $231 million drawn on its $525 million reserve-based lending facility, leaving total liquidity of $290 million. Management says net debt will more than halve in Q1 2026 following the $56 million receipt from TotalEnergies. Group tax assets more than doubled in 2025 and have a notional value of over $1 billion.
The company has been adding hedges since early March, taking advantage of stronger front-end prices while protecting the downside. For 2026, oil hedged volumes range between 15 and 23 kboe/d with floors mostly around $60-64/bbl, and gas hedged volumes around 8-10 kboe/d with floors largely 61-83p/therm. This should support 2026 cash generation alongside guidance capex of $175-195 million and opex of $380-400 million. Management expects material free cash flow in 2026 even at $63/bbl and 69p/therm.
Why this update matters for investors
What looks positive
- Production momentum: output has rebounded since March and management is confident on a step up to over 65,000 boepd by end 2026.
- Portfolio diversification: producing fields set to more than double, reducing single-asset risk.
- Strategic infrastructure: operatorship of the Shetland Gas Plant opens up owned and third-party throughput opportunities.
- Reserves growth: pro forma 2P up 19% to 138.5 mmboe; 2C also higher, giving a clear hopper for the next phase.
- Dividend maintained: a 10p final dividend signals confidence in 2026 cash flows despite a tough 2025.
- Hedging discipline and liquidity: downside protection in place and a sizeable RBL for flexibility, plus an expected near-term reduction in net debt.
- Main Market move: intention to shift from AIM to the LSE Main Market in Q3 2026 should broaden the shareholder base.
What to watch carefully
- Triton reliability: a planned 65‑day shutdown is coming in Q3. Sustained stable operations after that are essential to hit the year-end production goal.
- Free cash flow trajectory: 2025 free cash flow was negative $24 million. Delivery against the 2026 FCF outlook now needs to come through.
- Decommissioning and provisions: total provisions rose to $252 million, including Lancaster. Execution and timing matter for cash.
- Fiscal backdrop: the Energy Profits Levy extension drove a 165% book tax rate in 2025. Any policy shifts will feed straight into economics.
Operational catalysts and timeline
- Deal completions: Catcher, Golden Eagle Area Development and the Spirit Energy portfolio to complete through 2026.
- Capital Markets Day in Q2 2026: more detail on organic growth ranking, capital allocation and returns.
- Triton and Bruce planned shutdowns in Q3 2026: key milestones for reliability improvements.
- Kyla redevelopment progress and Wagtail appraisal decision by 31 August 2026.
- Move to the Main Market targeted for Q3 2026.
Quick jargon check
- boepd: barrels of oil equivalent per day, a way to combine oil and gas volumes.
- 2P/2C: proved plus probable reserves, and contingent resources, respectively. 2P is higher confidence than 2C.
- EPL: the UK Energy Profits Levy, a windfall tax currently extended to 31 March 2030.
- RBL: reserve-based lending facility, a bank loan sized against the value of producing reserves.
My take
2025 shows the benefit of having a plan and the pain of operational hiccups. Serica took a sizeable operational knock but used the year to rewire the business. The portfolio is broader, gas weight has increased, reserves are higher on a pro forma basis and the Shetland Gas Plant adds a valuable strategic angle. If Triton reliability improves and the remaining acquisitions land on time, 2026 should look very different on cash generation. The 10p dividend and Main Market ambition underline that intent.
