Serica Energy (AIM:SQZ) told investors that production rose to 44,700 barrels of oil equivalent per day (boepd) in the first half, up from 24,700 boepd a year earlier, as improved reliability at its Triton hub and new production from West of Shetland assets drove a return to material cash generation.
The North Sea-focused oil and gas producer generated $184 million of free cash flow in the period, enabling it to move from net debt of $200 million at the end of 2025 to net cash of $26 million at 30 June. Cash climbed to $326 million, up from $31 million at year-end, helped by a $56 million payment on completion of the Greater Laggan Area acquisition from TotalEnergies in March.
Serica completed a $300 million five-year Nordic bond in May and, after the period end, refinanced its reserves-based lending facilities into a new $750 million six-year package, taking pro forma liquidity to $784 million.
"The operational work completed last year is now translating into much improved asset performance, most notably at Triton," said chief executive Chris Cox.
The company expects to sign a rig contract shortly for a roughly 400-day drilling programme targeting up to six wells, starting with the Bruce SCE and SCW wells in the third quarter of 2027, with potential first production 12 months later.
The Spirit Energy asset acquisition is now expected to complete on 1 October, later than previously guided, prompting revised 2026 production guidance of above 40,000 boepd, down from "significantly above" that level.
Post-tax cash flow from operations guidance was trimmed to $450-475 million.
Serica declared an interim dividend of 6p, unchanged from 2025.
News Intelligence what this means for the company
Serica swung to net cash of $26m in H1 2026 on the back of a near-doubling of production to 44,700 boepd, driven by improved Triton hub reliability and new West of Shetland output. The $184m free cash flow generation and $784m pro forma liquidity position the company to fund an organic drilling campaign targeting up to six wells from Q3 2027, though the delayed Spirit Energy acquisition completion pushed 2026 production guidance down to above 40,000 boepd from "significantly above" that level.
The shift to net cash and material free cash flow validates the operational turnaround narrative, but the revised 2026 production guidance and delayed acquisition completion signal execution risk on near-term growth. The 6p interim dividend is unchanged despite the cash generation uplift, suggesting the company is prioritizing balance sheet strength and the drilling programme over shareholder returns.
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