StockMarketWire.com - Oil company Serica Energy has announced lower pre-tax profit and an operating loss for the first half of 2020 due to COVID-19 disruption and 'steep falls' in oil and gas prices, as well as a shut-in on its BKR fields.

In its results for the six months ended 30 June 2020, it reported group pre-tax profit of £20.4m, down from £51.9m in the same period a year earlier, after a £33m reduction in fair value of BKR liabilities following a 45 day shut-in of its BKR production to secure a damaged caisson on the Bruce platform.

Serica Energy reported a gross loss of £19.8m, compared to a profit of £52.4m in the first half of 2019, and an operating loss of £12.7m in the first half of 2020, from a £52.5m profit a year earlier.

Group average production of 21,600 boe per day net to Serica was 'significantly lower' and reflected the impact of the Bruce caisson shut-in on the BKR fields and maintenance work carried out on Erskine.

The group paid a dividend of 3p per share in July.

Chief executive Mitch Flegg said: 'I am pleased that we are able to report a mid-year profit before and after tax despite the challenging economic conditions encountered during the first half of 2020.

'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.'

It said that while commodity prices remained volatile, both oil and gas had rebounded from their historical lows.

At 9:53am: [LON:SQZ] Serica Energy PLC share price was -5.5p at 106.3p



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