Preparations to drill North Eigg underway as Serica posts ‘strong balance sheet’ for 2020

Preparations to drill North Eigg underway as Serica posts ‘strong balance sheet’ for 2020

Serica Energy has said preparations are underway to drill the North Eigg gas prospect next year after it strengthened its “financial and operational foundations” in 2020.

In its full year results released on Thursday, the London-listed firm published pre-tax profits of £12.5 million, compared to £108.8m in 2019.

The drop was blamed on low commodity prices and the deterioration of a caisson at its Bruce platform that led to a 45-day shutdown.

The incident, as wel as “other field maintenance work” also impacted average net production, which was 23,800 barrels of oil equivalent (boe) per day in 2020, down from 30,000 boe per day in 2019. n

In July, Serica paid out its maiden dividend of 3 pence per share, totalling £8m.

That will increase to 3.5 pence per share for 2021, subject to shareholder approval.

As well as “weathering the storm”, the upstream firm was also able to “move forward” with all of its projects, while the stabilisation in gas prices, which accounts for 80% of Serica's production, has also allowed for continued investment, particularly on its Columbus field and Rhum R3 intervention.

Drilling on Columbus, which was delayed due to Covid, got underway in March with the use of the Maersk Resilient heavy duty jack-up