Serica Energy (SQZ) generated net operating cash-flow amounting to £89.8m at the half-year, compared to an outflow of £5.29m a year earlier. This was helped along by a recovery in transaction receivables, and a sure illustration of the transformative impact of the deals which captured stakes in the Bruce, Keith and Rhum (BKR) fields in the North Sea.
The driller is not only looking to increase the productivity of its newly purchased Bruce oil and gas hub, possibly through additional drilling, but the retained share of cash flows from the BKR assets is set to increase from 50 to 60 per cent for 2020/21, and 100 per cent thereafter.
Operating costs, including those for BKR, were down by a third to $12.30 (£9.84) per barrel of oil equivalent (boe), while the average sale price was down a quarter to $34 per boe, reflecting lower gas prices in 2019. The upshot was that operating profit came in at £52.5m after non-cash depletion charges of £37.3m, against a loss of £7.95m last time around.
Consensus estimates are for adjusted full-year EPS of 15.1p, rising to 15.9p in 2020.
| SERICA ENERGY (SQZ) | ||||
| ORD PRICE: | 127p | MARKET VALUE: | £ 339m | |
| TOUCH: | 127-128.6p | 12-MONTH HIGH: | 146p | LOW: 76p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 4 | |
| NET ASSET VALUE: | 64p | NET CASH: | £88.2m* | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 (restated) | 3.30 | -7.92 | -2.00 | nil |
| 2019 | 146 | 51.9 | 11.0 | nil |
| % change | +4330 | - | - | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| *Excludes financial liabilities and payments owed to former BKR owners. | ||||
