Serica Energy has called for an end to the EPL "soon as reasonably possible" after seeing a pre-tax 2025 profit of $80million (£60million) turned into a $52million (£39million) loss.
The figures were revealed this morning as Serica posted its 2025 full-year results, and also confirmed the acquisition of a 40% operated interest in the Greater Laggan Area and associated infrastructure, and operated licence interests in four near field exploration blocks, from TotalEnergies, has now completed.
CEO Chris Cox said 2025 was a year of "positive strategic progress", and that Serica is now "better placed than ever" to deliver value for shareholders and contribute to UK energy security.
But in his statement, Chairman David Latin called for the urgent replacement of the damaging Energy Profits Levy.
The company's income statement shows a pre-tax profit for 2025 of $80million, half the 2024 figure of $160million.
But after taxation, that profit turned into a loss of $52million, while the corresponding figure from 2024 was a profit of $92million.
Mr Latin said: "In my statement last year, I reported that common sense UK Government policies for the North Sea would prioritise domestic production over imports. Regrettably, the merits of such an approach are being reinforced by the interruption to oil and gas supplies from the Middle East. Our thoughts are with all those affected by the situation.
"I also wrote last year that confidence in the UK North Sea sector had been eroded. Since then, the Government has continued to solicit opinions and information through formal consultations and dialogue, which has been welcome, but this has not yet translated into actions which would support a world class and valuable industry. I take this opportunity, therefore, to repeat our request for a change in approach, to which end I offer a four-point plan.
"Firstly, demonstrate a willingness to approve the development of new oil and gas fields. There are project approval decisions which could be made now and others to come over the next several months which would reduce the risks to the UK of future oil and gas crises and could even help with the current crisis if it is prolonged.
"Secondly, revisit the decision not to award new exploration licences. There is significant untapped oil and gas potential on the UK Continental Shelf and companies like Serica are willing and able to take the financial risks of exploration. We do not ask for subsidies to undertake these activities. We only ask for the ability to do so at our own financial risk.
"Thirdly, as soon as reasonably possible, replace the Energy Profits Levy with a permanent, properly designed mechanism for raising the level of tax on UK oil and gas production during periods of true 'windfall' prices. Much collaborative work by officials and the industry has already gone into the design of just such a tax in the form of the Oil and Gas Price Mechanism ('OGPM') intended to replace the EPL. Implementing this change would still see the Exchequer share fairly in windfalls caused by price shocks, but would be a huge step towards rebuilding confidence in the sector.
"Finally, talk about the UK North Sea sector as a national asset; a longstanding source of economic value, world-class skills and immense pride amongst the people and communities involved. Too often in reports and ministerial statements, the sector is referred to in terms which imply irrelevance despite it being the single largest source of energy in the UK, or being less desirable than other sectors even though it supports some 200,000 jobs, many of which are highly skilled. The people working in the sector, or dependent on it across the country, deserve better. Moreover, a sector talked up rather than down will deliver more, benefiting the country as a whole.
"Maximising the benefits available to the UK from domestic oil and gas and achieving net zero by 2050 are not mutually exclusive objectives. Indeed, they complement each other, not least when oil and gas imported over thousands of miles typically comes with significantly higher emissions than the equivalent domestic production.
"These facts are understood and are being acted upon by other oil and gas producing countries in western Europe. Amongst those countries, the UK holds the second largest resource of oil and gas. For the benefit of ourselves and regional security, we should exploit to the full that position of good fortune and much skill."
Chris Cox, Serica's CEO, stated: "Serica delivered positive strategic progress in 2025, significantly strengthening our portfolio and organisation, and positioning the company for materially increased production and the delivery of future growth.
"Successful acquisitions mean that Serica will have an increasingly resilient and diversified portfolio, with production set to reach over 65,000 boepd by the end of 2026 as they all complete.
"Our production is generating material cash flows, enhanced further at current commodity prices, boosting our liquidity position and supporting our ability to allocate capital to both attractive growth opportunities and shareholder returns.
"Our disciplined capital allocation is focused on the short‑cycle, low‑risk opportunities in our portfolio.
"Following our newly completed transaction with TotalEnergies we also operate strategic West of Shetland gas processing infrastructure serving one of the UKCS' most prospective hydrocarbon regions at a time when the importance of domestic gas supply is so starkly in focus.
"2026 will be a year of further delivery on our strategy as we high‑grade and progress our organic growth opportunities, and deliver stronger, more reliable performance across a diversified asset base.
"Serica is better placed than ever to create sustainable value for shareholders and be an important contributor to the UK's energy security."
FSTE100
The UK's flagship share index, the FTSE 100, was down 22 points at 10,038 shortly after opening this morning.
Brent crude oil futures were up 1.62% at $104.73 a barrel.
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