Serica Energy Forecasts Over 40,000 Boepd in 2026, Eyes Main Market Move

At the Triton Hub, the Bittern pipeline works and the second compressor project are complete. Serica is optimising stable production through one compressor at around 21,000 boepd net. If stability holds, there is scope to move to two-compressor operations and increase throughput, particularly from new wells like Evelyn EV-02 and Belinda (both 100% Serica). The Triton FPSO’s planned Q3 shutdown is forecast at approximately 65 days. FPSO stands for floating production, storage and offloading vessel.

West of Shetland, the Lancaster field (100% Serica, operator) is producing around 6,000 boepd and is expected to cease production in Q2 2026, after which the FPSO will leave the field.

Costs, capex and hedges: building resilience

For 2026, opex is guided at $380-400 million, excluding around $65 million related to the Lancaster FPSO charter through cessation of production. Base capex is $125-145 million, with over half on Bruce. Key projects include a c.$30 million WAD umbilical replacement at Bruce and commissioning of a flare gas recovery project to reduce emissions.

There is also approximately $50 million of spend planned ahead of possible infill drilling, mostly at Bruce, contingent on sanction. Decommissioning outflow is set to be around $20 million, of which around $15 million is Lancaster.

Hedging gives useful downside protection. For 2026 and 2027, Serica has hedged roughly 12,300 boepd and 7,100 boepd respectively, with floors at $60/bbl for oil and 67p/therm for gas. The hedge book is currently $30 million in-the-money on a mark-to-market basis.

Growth options and M&A: diversification stepping up

Management says the enlarged portfolio and rising asset reliability should lift average production significantly above 40,000 boepd in 2026. Depending on when announced deals complete, production potential could exceed 65,000 boepd, with the number of producing fields set to more than double. More fields means better diversification, which generally improves reliability and revenue predictability.

On the M&A front, Serica has completed Prax Upstream and expects to complete in H1 2026 the acquisition of a 40% operated stake in the Greater Laggan Area and the Shetland Gas Plant from TotalEnergies, and non-operated interests in Catcher and Golden Eagle from ONE-Dyas. In H2 2026, Serica intends to complete the acquisition of Southern North Sea assets from Spirit Energy, including a 15% interest in Cygnus, a 25% interest in Clipper South, and operated positions in the Greater Markham Area, subject to usual conditions and consultation processes.

Organically, Serica is high-grading an attractive set of projects. Expect more detail on potential Bruce infill drilling at the full-year results on 26 March, followed by a Spring investor event to outline capital allocation and the broader organic growth pipeline.

What I think: positives, watch-outs and why it matters

• Positives: early 2026 production is strong, hedges are in-the-money, cash taxes have dropped to $9 million, and management guides to material free cash flow generation in 2026 at prevailing prices. The shift to the Main Market in 2026, if achieved, should improve visibility and access to capital.
• Watch-outs: year-end cash fell to $31 million and net debt was $200 million, so execution and commodity prices still matter. Q3 brings notable planned downtime – around 24 days at Bruce and 65 days at Triton – which will need managing. Lancaster stops in Q2 with associated FPSO and decommissioning costs. The dividend was lower in 2025 at 16p/share versus 23p/share in 2024.
• Big swing factor: timing of acquisitions. The faster the completions, the sooner diversification and higher production rates flow through. Until then, expect some quarterly variability around shutdowns and ramp-ups.

Overall, the tone is constructive. In my view, Serica is trading 2025’s negative free cash flow for a 2026 set-up that is better hedged, more diversified and primed for organic and inorganic growth. Delivery on reliability, infill sanctioning and deal completions will be the key catalysts.

Key figures to remember

Item	Figure
2025 production	27,600 boepd
2026 YTD production	43,000 boepd (current ~50,000 boepd)
2026 production guidance	Significantly over 40,000 boepd
Potential peak (deal timing dependent)	Exceed 65,000 boepd
2026 opex	$380-400 million (excl. c.$65 million Lancaster FPSO)
2026 base capex	$125-145 million
Pre-infill prep and long-lead items	c.$50 million
Hedged volumes	2026: ~12,300 boepd, 2027: ~7,100 boepd
Hedge floors	$60/bbl oil, 67p/therm gas
Hedge MTM	$30 million in-the-money

Next dates and what to watch

• 26 March 2026: full-year 2025 results and more detail on Bruce infill plans.
• Spring 2026: investor event on capital allocation and organic growth projects.
• H1 and H2 2026: acquisition completion milestones and integration progress.
• Q3 2026: planned shutdowns at Bruce and Triton – watch production management.

If Serica executes on reliability, completes the deals and sanctions the right infills, 2026 should look markedly better than 2025 on volumes, diversity and cash generation.