Serica Energy (SQZ) AI Stock Analysis

• Market Cap: £598.97M
• Dividend Yield: 13.12%
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 8.2
• Beta (1Y): 1.50
• Revenue Growth: -9.79%
• EPS Growth: -46.17%
• Country: UK
• Employees: 228
• Sector: Energy
• Sector Strength: 51
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.02
• Shares Outstanding: 393,026,430
• 10 Day Avg. Volume: 2,337,083
• 30 Day Avg. Volume: 1,741,208
• PEG Ratio: 0.02
• Price to Book (P/B): 1.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.37
• Enterprise Value/Market Cap: 0.61
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 1.26
• Enterprise Value/Ebitda: 0.21
• 1Y Price Target: £203.00
• Price Target Upside: 33.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: 192.00p ▲(25.98%Upside)

The overall score reflects strong corporate events and valuation metrics, despite financial performance challenges. Technical indicators show strong momentum but caution due to overbought signals.

Positive Factors

Financial Performance

The risked NAV has been increased from 200p to 221p per share, reflecting positive adjustments.

Growth Prospects

There is an upside potential of 64.9% to the price target, indicating significant growth prospects.

Production Guidance

The risk of missing production guidance is now seen as low, assuming the extended maintenance shutdown runs to plan.

Negative Factors

Operational Challenges

Triton's uptime has deteriorated every year since 2021, affecting overall performance.

Vessel Repairs

Vessel repairs are now not expected to complete before May, versus late March previously.

Windfall Taxes

Windfall taxes have curtailed a significant amount of potential investment in 2025 that could have created value for investors.

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; and 50% interest in the Rhum gas fields located in the Northern North Sea, as well as 18% non-operating interest in the Erskine field located in Central North Sea. It also operates the Columbus development, and Skerryvore and Ruvaal prospects located in Central North Sea; and North and South Eigg exploration prospects located in the Northern North Sea. Serica Energy plc was founded in 2004 and is headquartered in Aberdeen, the United Kingdom.

How the Company Makes Money

Serica Energy makes money through the extraction and sale of oil and gas. The company's revenue model is primarily based on the production and sale of hydrocarbons from its operated and non-operated assets in the UKCS. Key revenue streams include the sale of crude oil and natural gas to various markets, which are subject to fluctuations in global commodity prices. Additionally, Serica Energy benefits from partnerships and joint ventures with other energy companies, allowing it to share operational risks and costs while enhancing production capabilities. The company's financial performance is significantly influenced by its ability to optimize production efficiency and manage operational costs effectively.

Serica Energy Financial Statement Overview

Summary

Serica Energy has a stable financial base with a strong balance sheet characterized by low leverage and solid equity. However, challenges in profit margins and revenue consistency affect its overall profitability and cash flow.

Income Statement

Serica Energy shows a mixed performance in the income statement. The gross profit margin is healthy, but there is a noticeable decline in net profit and EBIT margins compared to previous years. Revenue growth is inconsistent, with a notable decrease from 2022 to 2023. The company needs to stabilize its revenue and profit margins for improved financial health.

Balance Sheet

The balance sheet is strong with a satisfactory equity ratio and zero debt in recent years, indicating low financial risk. However, the return on equity has decreased from previous levels, which could signal inefficiencies in generating profits from equity. Overall, the company maintains a stable financial position with minimal leverage.

Cash Flow

Cash flow performance is moderate, with some inconsistencies in free cash flow growth. The operating cash flow to net income ratio suggests efficient cash generation from operations, yet the free cash flow to net income ratio has been fluctuating. The company should focus on enhancing its free cash flow to support future investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	657.44M	727.18M	632.64M	998.52M	514.14M	125.64M
Gross Profit	290.19M	223.20M	306.57M	730.40M	386.82M	-2.92M
EBITDA	389.90M	380.03M	432.17M	695.66M	172.68M	51.55M
Net Income	-7.19M	92.43M	102.98M	218.52M	79.29M	7.78M
Balance Sheet
Total Assets	1.26B	1.46B	1.58B	862.38M	686.67M	447.46M
Cash, Cash Equivalents and Short-Term Investments	286.50M	117.46M	245.19M	414.43M	80.08M	89.33M
Total Debt	173.14M	224.32M	213.03M	0.00	0.00	516.00K
Total Liabilities	602.79M	668.29M	741.92M	453.66M	414.14M	247.62M
Stockholders Equity	658.08M	796.46M	655.26M	408.72M	272.53M	199.85M
Cash Flow
Free Cash Flow	-3.20M	21.39M	23.67M	569.11M	105.44M	17.43M
Operating Cash Flow	150.53M	281.56M	98.01M	688.45M	157.60M	44.07M
Investing Cash Flow	-141.73M	-253.91M	-108.77M	-229.19M	-134.35M	-47.94M
Financing Cash Flow	-167.16M	-213.28M	-154.37M	-56.08M	-9.25M	-7.99M

Serica Energy Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 152.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 152.4 is below the 20-day moving average (MA) of 156.62, above the 50-day MA of 139.34, and above the 200-day MA of 129.49, indicating a neutral trend. The MACD of 6.34 indicates Positive momentum. The RSI at 49.77 is Neutral, neither overbought nor oversold. The STOCH value of 4.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:SQZ.

Serica Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENQ	75 Outperform	£234.15M	3.29	18.48%	42.39%	-21.23%	―
SQZ	74 Outperform	£598.97M	8.20	11.29%	13.12%	-9.79%	-46.17%
GKP	72 Outperform	£332.45M	60.08	1.32%	8.78%	18.76%	―
DEC	66 Neutral	£855.57M	―	-16.60%	7.86%	-11.09%	-110.76%
Sector *	52 Neutral	C$2.91B	-0.88	-3.26%	6.30%	2.20%	-43.43%
PANR	48 Neutral	£279.46M	―	-4.37%	―	-100.00%	―
RKH		£316.83M	27.80	6.97%	―	―	―

Serica Energy Corporate Events

Serica Energy Transfers Treasury Shares to Employee Benefit Trust

Serica Energy plc announced the transfer of 541,985 Ordinary Shares from Treasury to its Employee Benefit Trust to satisfy Legacy LTIP and SIP Awards. This transaction results in the company no longer holding any Ordinary Shares in Treasury, with a total of 393,568,408 Ordinary Shares now in issue, which defines the voting rights for shareholders and others with notification obligations under the Financial Conduct Authority’s rules.

The most recent analyst rating on (GB:SQZ) stock is a Buy with a £232.00 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.

Serica Energy Announces Long Term Incentive Plan Awards

Serica Energy plc announced the granting of nil-cost options over 1,703,189 ordinary shares under its 2017 Long Term Incentive Plan. These awards, aimed at incentivizing the executive team and senior management, are contingent on performance criteria related to total shareholder return and emissions reduction targets. This move is designed to align management’s interests with those of shareholders and enhance the company’s operational and environmental performance.

The most recent analyst rating on (GB:SQZ) stock is a Buy with a £185.00 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.

Serica Energy Announces Successful AGM Results and Board Changes

Serica Energy PLC announced that all resolutions proposed at its Annual General Meeting were passed by shareholders. The voting results indicate strong support for the company’s management and strategic direction, with most resolutions receiving over 98% approval. Additionally, Jérôme Schmitt retired from the Board, marking a change in the company’s leadership structure.

The most recent analyst rating on (GB:SQZ) stock is a Buy with a £185.00 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.

Serica Energy Boosts Production and Strategic Flexibility with Key Developments

Serica Energy has announced a positive trading and operations update, highlighting the successful maintenance and drilling activities at the Triton Hub, which are expected to significantly boost production and cash generation in the latter half of the year. The company also completed the acquisition of Parkmead (E&P) Limited, enhancing its tax position and strategic flexibility, while maintaining a disciplined approach to M&A and shareholder returns amidst a challenging regulatory environment.

The most recent analyst rating on (GB:SQZ) stock is a Buy with a £185.00 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.

Serica Energy Announces Operational Success and Strategic Acquisition

Serica Energy has announced significant operational updates, including the completion of maintenance work at Triton, which is expected to resume production by the end of June. The company has also reported impressive drilling results from new wells, which are expected to boost production and cash generation. Additionally, Serica has completed the acquisition of Parkmead (E&P) Limited, enhancing its strategic flexibility and tax position. The company remains focused on converting resources to reserves and is preparing for a potential move to the Main Market of the London Stock Exchange.

The most recent analyst rating on (GB:SQZ) stock is a Buy with a £185.00 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.

Serica Energy Confident in Standalone Growth Amidst EnQuest Withdrawal

Serica Energy announced that EnQuest Plc has decided not to pursue a firm offer for the company, citing current market volatility as a barrier to reaching an agreement beneficial to shareholders. Despite this, Serica remains confident in its ability to generate substantial cash flow and shareholder value independently, focusing on sustainable operational improvements and pursuing growth through organic opportunities and strategic M&A in the UK North Sea and beyond.

Serica Energy Releases 2024 Annual and ESG Reports, Announces 2025 AGM

Serica Energy has published its 2024 Annual Report and Environmental, Social, and Governance (ESG) Report following the release of its financial results for the year ended 31 December 2024. The company also announced the Notice of its 2025 Annual General Meeting, scheduled for 22 May 2025. These publications are part of Serica’s ongoing commitment to transparency and stakeholder engagement, reflecting its strategic focus on sustainable operations and growth in the UK energy sector.

Serica Energy Extends Deadline for EnQuest Takeover Talks

Serica Energy has announced an extension of the PUSU Deadline for its ongoing discussions with EnQuest regarding a potential reverse takeover. This extension allows EnQuest until May 2, 2025, to declare its intentions, impacting Serica’s strategic positioning and potentially affecting stakeholders depending on the outcome of these negotiations.

Serica Energy Transfers Treasury Shares to Employee Trust

Serica Energy plc has transferred 1,500,000 Ordinary Shares from its treasury to the Company’s Employee Benefit Trust to satisfy LTIP and SIP Awards. Following this transaction, the company holds 541,985 Ordinary Shares in treasury, with a total of 393,568,408 shares in issue, impacting the total voting rights available to shareholders.

Serica Energy Reports 2024 Financial Results Amid Strategic Adjustments

Serica Energy announced its audited financial results for 2024, highlighting challenges and strategic adjustments. Despite positive drilling results at the Triton field, production and cash flow have been impacted by issues at the Triton FPSO. The company is addressing these by advancing maintenance work, which should enhance uptime and production reliability. Serica’s subsurface analysis has led to a decrease in 2P reserves but a significant increase in 2C resources, indicating strong potential for future resource conversion. The company is rebalancing its capital allocation to focus on high-value projects and maintain competitive shareholder returns. Financially, Serica remains profitable and cash-generative, despite a decrease in profit before tax due to lower volumes and prices. The company maintains a robust balance sheet, with significant tax loss shelters supporting ongoing investment and growth strategies.

Serica Energy Announces Total Voting Rights for March 2025

Serica Energy PLC has announced its total voting rights as of March 31, 2025, in compliance with the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules. The company reports a total of 391,526,423 voting rights, with 2,041,985 ordinary shares held in treasury. This information is crucial for shareholders to determine their interest or changes in interest in the company.