Serica Energy stock sinks on FPSO issues

Published 18/02/2025, 10:52
© Reuters.

Investing.com -- Shares of Serica Energy PLC (LON:SQZ) tumbled 13% following the announcement that the Triton Area FPSO has been taken offline due to integrity issues caused by recent Storm Éowyn.

The company stated that the full-year 2025 production guidance of "around 40,000boe/d" is now under review and subject to revision, depending on the timeline and necessary actions to address the Triton FPSO's problems. The market's response reflects concerns over the impact this will have on the company's production capabilities.

The operational challenges have led to a halt in production, with a restart expected only by mid-to-late March. This unexpected downtime has raised questions about the operational integrity of the Triton FPSO, a critical asset for the company's output.

Jefferies analysts provided a somewhat reassuring perspective, commenting that "this news does put into question the operational integrity of the Triton FPSO, but we note solid production from the Bruce hub and other assets, with Jan production of 37kboe/d and Feb at 27kboe/d, into a robust gas market (Feb NBP ave 134p/th), providing some security to the dividend, in our view."

Despite the current setback, a third-party engineering study has assessed that the Triton FPSO has the potential to continue production well into the next decade.

This suggests that while short-term production issues are a concern, the long-term prospects of the asset remain intact.

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