Serica Energy PLC (GB:SQZ)
LSE:SQZ
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Serica Energy
(LSE:SQZ)
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Rating:63Neutral
Price Target:
313.00 p
▲(21.41% Upside)
Action:ReiteratedDate:04/01/26
The score is driven by weakened recent financial performance (2025 revenue drop, net loss, and negative free cash flow) offset by strong technical momentum and a constructive earnings-call outlook (reiterated 2026 guidance, improving net debt trajectory, dividend maintained). Valuation is supported by the high yield but tempered by the loss-driven negative P/E.
Positive Factors
Reserves and resource growth
Material pro‑forma 2P reserve growth (+19%) and 2C expansion (>100m bbl) lengthen Serica’s production runway and reduce reliance on short‑term discoveries. A larger, bookable reserve base supports sustainable future cash flows, underwriting production targets, dividends and M&A optionality over coming years.
Negative Factors
Concentration and Triton reliability
Operational concentration at Triton is a structural vulnerability: single‑compressor limitations and past unscheduled outages produced large production and revenue losses. Persistent reliability risk can repeatedly depress volumes, margins and cash generation until redundant capacity and reliability are demonstrably restored.
Read all positive and negative factors
Positive Factors
Negative Factors
Reserves and resource growth
Material pro‑forma 2P reserve growth (+19%) and 2C expansion (>100m bbl) lengthen Serica’s production runway and reduce reliance on short‑term discoveries. A larger, bookable reserve base supports sustainable future cash flows, underwriting production targets, dividends and M&A optionality over coming years.
Read all positive factors
Serica Energy (SQZ) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£1.01B
Dividend Yield9.3%
Average Volume (3M)2.50M
Price to Earnings (P/E)―
Beta (1Y)1.18
Revenue Growth-32.89%
EPS Growth-239.58%
CountryUK
Employees228
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)-0.02
Shares Outstanding393,026,430
10 Day Avg. Volume2,432,887
30 Day Avg. Volume2,504,453
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)1.02
Price to Sales (P/S)1.12
P/FCF Ratio-32.32
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£313.67Price Target Upside21.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.52
Revenue Forecast (FY)£1.18B
Serica Energy Business Overview & Revenue Model
Company Description
Serica Energy plc, an upstream oil and gas company, engages in the identification, acquisition, exploration, and exploitation of oil and gas reserves. The company holds 100% interest in the Keith oil fields; 98% interest in the Bruce gas fields; a...
How the Company Makes Money
Serica Energy makes money primarily by producing and selling natural gas and crude oil (and associated liquids) from its offshore UK assets. Revenue is generated from: (1) Hydrocarbon sales: the company sells produced volumes to buyers at prices t...
Serica Energy Earnings Call Summary
Earnings Call Date:Mar 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Sep 16, 2026
Earnings Call Sentiment Positive
The call balanced clear strategic progress (active, accretive M&A, reserves up 19%, strengthened balance sheet trajectory, maintained dividend and robust hedging) with significant operational and accounting headwinds (Triton outages causing an estimated $250m missed revenue, revenues down 20%, reported loss after tax driven by a $130m deferred tax charge). Management expresses confidence in near-term cash generation, asset integration and production growth (targeting ~65,000 b/d), and has taken steps to strengthen capability and hedging. Given the combination of meaningful operational challenges that materially impacted 2025 results but substantial strategic and financial positives that support recovery and growth, the overall tone of the call is constructive and optimistic about 2026.Positive Updates
Material Reserves and Resource Growth
2P reserves increased 19% on a pro forma basis due to M&A; reserves replacement effectively 100% in 2025 (10.2m bbl moved into 2P offsets 10.1m bbl produced). 2C resources increased 16%, including +18.2m bbl from Bruce and +8m bbl from Wagtail, taking total 2C resources to over 100m barrels.
Negative Updates
Significant Operational Disruption at Triton
Unscheduled maintenance at Triton in Feb–Mar caused a shutdown of just over three weeks; single gas export compressor in service currently limits maximum production to ~25,000 b/d net to Serica until reliability is restored. Management estimates missed revenues of approximately $250m in 2025 attributable to Triton underperformance.
Read all updates
Q4-2025 Updates
Positive
Negative
Material Reserves and Resource Growth
2P reserves increased 19% on a pro forma basis due to M&A; reserves replacement effectively 100% in 2025 (10.2m bbl moved into 2P offsets 10.1m bbl produced). 2C resources increased 16%, including +18.2m bbl from Bruce and +8m bbl from Wagtail, taking total 2C resources to over 100m barrels.
Read all positive updates
Company Guidance
Serica reiterated its January guidance for production, OpEx and CapEx, maintaining 2026 production guidance of "significantly over 40,000 b/d" and targeting ~65,000 b/d by year-end (noting Lancaster ceases in May), with the Bruce hub regularly ~20,000 b/d net and Triton currently limited to roughly 25,000 b/d net on a single gas-export compressor (fortnight post-restart averaged >50,000 b/d); acquisitions are expected to add >20,000 b/d (TotalEnergies >5,000 b/d unhedged). Financially the group has more than halved net debt since year-end $200m (≈1x EBITDAX) and is on track to be net cash by end-H1, reiterated a full-year dividend of 16p (10p final proposed), and reminded investors revenues for 2025 were $601m with PBT $80m and an after-tax loss of $52m driven by a $130m deferred tax charge. The company is hedged for ~60% of 2026 production and ~50% of 2027 (gas ~50% in 2026, <40% in 2027), leaving roughly 40% upside exposure in 2026 and ~55% in 2027 (estimated realized prices ~$80/bbl if Brent $100 and ~130p/therm if gas 150p), has ~$2bn of corp/SCT tax losses plus ~$500m EPL losses (notional value ~ $1bn), and reports pro‑forma 2P reserves +19%, 2C resources +16% to >100m bbl, ~100% reserves replacement in 2025 and decommissioning provisions of < $2 per 2P boe.Serica Energy Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
66
Positive
Cash Flow
55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 614.05M | 727.18M | 632.64M | 998.52M | 514.14M |
| Gross Profit | 57.13M | 223.20M | 306.57M | 730.40M | 386.82M |
| EBITDA | 200.34M | 380.03M | 538.44M | 684.98M | 172.68M |
| Net Income | -52.91M | 92.43M | 102.98M | 215.17M | 79.29M |
Balance Sheet | |||||
| Total Assets | 2.17B | 1.46B | 1.58B | 862.38M | 686.67M |
| Cash, Cash Equivalents and Short-Term Investments | 30.91M | 118.58M | 263.12M | 414.43M | 80.08M |
| Total Debt | 227.29M | 224.32M | 213.03M | 213.00K | 0.00 |
| Total Liabilities | 1.50B | 668.29M | 582.80M | 453.66M | 414.14M |
| Stockholders Equity | 669.82M | 796.46M | 655.26M | 408.72M | 272.53M |
Cash Flow | |||||
| Free Cash Flow | -21.20M | 21.39M | 23.67M | 569.11M | 105.44M |
| Operating Cash Flow | 226.46M | 281.56M | 98.01M | 688.45M | 157.60M |
| Investing Cash Flow | -263.94M | -253.91M | -108.77M | -229.19M | -134.35M |
| Financing Cash Flow | -98.46M | -213.28M | -154.37M | -56.08M | -9.25M |
Serica Energy Technical Analysis
Neutral
257.80
Price Trends
244.16
Positive
214.56
Positive
193.90
Positive
Market Momentum
8.52
Positive
48.51
Neutral
64.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SQZ, the sentiment is Neutral. The current price of 257.8 is below the 20-day moving average (MA) of 268.07, above the 50-day MA of 244.16, and above the 200-day MA of 193.90, indicating a neutral trend. The MACD of 8.52 indicates Positive momentum. The RSI at 48.51 is Neutral, neither overbought nor oversold. The STOCH value of 64.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:SQZ.
Serica Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | £441.61M | 33.45 | 3.18% | 8.66% | 38.03% | 94.56% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | £1.01B | -12.95 | -6.09% | 9.30% | -32.89% | -239.58% | |
63 Neutral | £933.81M | 3.09 | 40.22% | 10.49% | 56.20% | -185.69% | |
56 Neutral | £354.17M | 166.34 | 0.54% | 4.36% | -18.05% | -634.88% | |
53 Neutral | £721.88M | -2.65 | -19.93% | ― | ― | ― | |
50 Neutral | £148.82M | -24.27 | -11.54% | ― | -0.20% | -25.68% |
* Energy Sector Average
GB:SQZ
Serica Energy
257.80
151.85
143.32%
GB:GENL
Genel Energy
54.05
2.15
4.14%
GB:DEC
Diversified Energy Company
1,198.00
455.92
61.44%
GB:ENQ
Enquest
19.00
7.77
69.17%
GB:RKH
Rockhopper Exploration
84.00
46.10
121.64%
GB:GKP
Gulf Keystone Petroleum
203.00
58.69
40.67%
Serica Energy Corporate Events
Business Operations and StrategyDelistings and Listing ChangesDividendsFinancial DisclosuresM&A Transactions
Serica Energy bets on M&A and gas‑weighted growth as 2025 earnings soften
Neutral
Mar 26, 2026
Serica Energy reported 2025 results showing reduced production and cash flow, with output averaging 27,600 boepd and revenue falling to $601 million as unplanned outages at the Triton FPSO weighed on performance, leading to a small negative free c...
Business Operations and StrategyM&A Transactions
Serica Energy Completes Greater Laggan Deal, Securing New West of Shetland Hub
Positive
Mar 26, 2026
Serica Energy has completed the acquisition from TotalEnergies of a 40% operated interest in the Greater Laggan Area and associated infrastructure, along with operated licences in four nearby exploration blocks. The deal establishes a new operated...
Business Operations and StrategyDelistings and Listing ChangesDividendsFinancial DisclosuresM&A Transactions
Serica Energy Targets Step-Change in Output and Cash Flow After 2025 Dip
Positive
Jan 21, 2026
Serica Energy reported 2025 production of 27,600 boepd and revenue of $601 million, both down on the prior year but broadly in line with guidance, as lower volumes, weaker realised oil prices and higher operating costs resulted in slightly negativ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.