SERICA Energy has managed to report pre-tax profits in the first half of 2020.
The North Sea business recorded £20.4 million for the first six months – but it was still much lower than the £51.9m recorded for the same period last year.
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Mitch Flegg, Serica’s chief executive officer, said the company had benefitted from “an extremely low cost base”.
Production dropped to 21,600 barrels of oil equivalent (boe) per day from 30,000 boe per day for full year 2019, largely due to a 45-day shutdown of the Bruce, Keith and Rhum assets.
Serica acquired operatorship of The Rhum field, which is 240 miles north-east of Aberdeen, along with Bruce and Keith in 2018.
Operations will soon commence to bring a third production well on the Rhum field into action.
Work to fix a damaged caisson on the Bruce platform pushed up operating costs to a still-lean $15.12 per barrel, from $12.30 previously.
Revenues dropped by about £100m to £46m, but would have fallen further had it not been for the company’s hedging programme, which has been extended.
The company had cash of £101.1m at the end of June, with no borrowings, and said it was in a “strong position to identify growth opportunities”.
Mr Flegg said: “Serica benefits from an extremely low cost base and we have managed to further reduce our absolute costs in 2020.
“We have also profited from significant gas price hedges covering approximately 50% of H1 retained gas sales after adjustment for net cash flow sharing and we expect to continue to benefit from the strategy that has seen us increase and extend these hedges this year.
“As a result, we have not had to furlough or lay off any staff nor have we had to take advantage of any of the various government schemes that were made available to support industry.”
