Serica Energy (SQZ) AI Stock Analysis

• Market Cap: £679.94M
• Dividend Yield: 10.98%
• Average Volume (3M): 1.75M
• Price to Earnings (P/E): 8.8
• Beta (1Y): 1.59
• Revenue Growth: -32.89%
• EPS Growth: -239.58%
• Country: UK
• Employees: 228
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): -0.07
• Shares Outstanding: 393,026,430
• 10 Day Avg. Volume: 1,686,273
• 30 Day Avg. Volume: 1,747,302
• PEG Ratio: -0.33
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 24.82
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £206.67
• Price Target Upside: 19.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 60 Neutral
• Price Target: 160.00p ▼(-7.51% Downside)

Serica Energy's overall stock score reflects a stable financial position with strong liquidity and strategic plans for future growth. However, the company faces challenges with inconsistent revenue growth, negative earnings, and short-term bearish technical indicators. The positive outlook for 2026 and strong dividend yield provide some optimism.

Positive Factors

Strong Financial Liquidity

The company's robust liquidity position provides a solid foundation for future investments and operational resilience, supporting long-term growth strategies.

Production Optimization

Successful production optimization at key assets enhances operational efficiency and supports revenue stability, crucial for sustainable growth.

Cost Management

Effective cost management in projects strengthens financial performance, allowing for reinvestment in growth opportunities and enhancing competitive positioning.

Negative Factors

Inconsistent Revenue Growth

Fluctuating revenue growth can undermine financial stability and investor confidence, necessitating strategic adjustments to stabilize income streams.

Regulatory and Tax Environment Concerns

Uncertain regulatory and tax environments can hinder project development and strategic planning, impacting long-term operational and financial outcomes.

Operational Challenges

Persistent operational challenges at key facilities can affect production efficiency and profitability, requiring ongoing attention to maintain performance levels.

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 generates revenue primarily through the sale of crude oil and natural gas produced from its operated and non-operated assets in the North Sea. The company benefits from a diversified revenue model that includes the sale of hydrocarbons at market prices, which can fluctuate based on global oil and gas markets. Key revenue streams include production from its flagship assets, such as the Bruce, Keith, and Rhum fields, along with potential revenues from new discoveries. Additionally, Serica may enter into joint ventures and partnerships to share the costs and risks associated with exploration and development, further enhancing its financial stability and growth potential.

Serica Energy Financial Statement Overview

Summary

Serica Energy has a stable financial base with a strong balance sheet and low leverage. However, challenges in profit margins and inconsistent revenue growth affect overall profitability and cash flow. Improvements in these areas are needed for better financial health.

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: Positive
• Last Price: 173.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SQZ, the sentiment is Positive. The current price of 173 is above the 20-day moving average (MA) of 167.79, above the 50-day MA of 168.91, and above the 200-day MA of 143.85, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 55.25 is Neutral, neither overbought nor oversold. The STOCH value of 90.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SQZ.

Serica Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GKP	70 Outperform	£475.24M	-1,368.75	1.40%	6.88%	38.03%	94.56%
SQZ	60 Neutral	£679.94M	8.79	-4.31%	10.98%	-32.89%	-239.58%
ENQ	59 Neutral	£216.53M	-2.57	17.29%	3.82%	-18.05%	-634.88%
DEC	56 Neutral	£823.93M	-5.21	-19.50%	7.74%	56.20%	-185.69%
PANR	47 Neutral	£331.69M	-25.89	―	―	-100.00%	―
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Serica Energy Corporate Events

Serica Energy Adjusts 2025 Production Guidance Amid Maintenance

Serica Energy announced a temporary reduction in production at the Triton FPSO due to maintenance and subsea intervention work. The production guidance for 2025 has been adjusted from 33,000-35,000 boepd to 29,000-32,000 boepd. The maintenance includes addressing a vibration issue in the compression trains, with normal operations expected to resume by the end of September. Additionally, subsea work on the Bittern field scheduled for November will temporarily halt production from the Evelyn and Gannet fields, reducing output by over 20,000 boepd. These developments are crucial for stakeholders as they impact Serica’s production targets and operational efficiency.

The most recent analyst rating on (GB:SQZ) stock is a Hold with a £184.00 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.

Serica Energy Resumes Oil Lifting at Triton FPSO

Serica Energy has announced the first lifting of oil from the Triton FPSO following the resumption of production. Production is ramping up as planned, with several wells being brought online, and Triton Hub production averaging 20,000 boepd net to Serica. The company maintains its production guidance for the year at 33,000 to 35,000 boepd, despite the annual maintenance period at the Bruce Hub.

The most recent analyst rating on (GB:SQZ) stock is a Buy with a £2.15 price target. To see the full list of analyst forecasts on Serica Energy stock, see the GB:SQZ Stock Forecast page.