The incoming boss of Serica Energy has warned that the windfall tax will not benefit people in the UK after it placed another dent in the firm's profits.
The Energy Profits Levy wiped-out around two-thirds of the North Sea producer's £306million profit in 2023, leaving it with £103million after tax.
Announcing the company's full annual results, David Latin, Serica's Chairman and incoming Interim CEO, warned the UK Government that the windfall profits of 2022 have gone.
"I am very pleased that Serica has delivered a strong set of results for 2023 despite significantly lower sales prices compared to 2022 and a full year of the UK marginal tax rate being at 75%," he said.
"Any 'windfall' due to high commodity prices has long gone and the high tax situation is ill-suited to a mature oil and gas basin such as the UK North Sea. Its continuation will not benefit people in the UK either financially or environmentally."
Today's update adds that the final investment decision on it Buchan Horst field will hinge on the "future tax regime which will apply through the life of the project."
Growth
Following the acquisition of Tailwind Energy in March last year, Serica is now producing 40,000 barrels per day and has reserves of 140 million barrels.
Mitch Flegg, Serica's outgoing CEO, said: "The completion of the Tailwind acquisition in March 2023 represented a step change in the scale and diversity of Serica's portfolio.
"The merits of seeking diversity and organic growth opportunities through the transaction have been borne out by the sharp decline in gas prices relative to oil prices during 2023 and Serica maintaining its track record of more than replacing production through reserves additions in both the Bruce and Triton production hubs.
"Moreover, there are further growth opportunities within the Company's existing producing fields and other assets in Serica's portfolio, such as the potential Buchan Horst project.
"My term as CEO ends with these results. More than the metrics of the last six years, it is the quality of the team we have built at Serica that gives me the most satisfaction and pride. Clearly, the BKR and Tailwind transactions represented the most significant organisational changes. Creating the culture and expertise of an organisation like Serica, however, is an everyday process that involves everyone in the company. I am grateful to far too many people to mention here.
"The result of the last several years is that Serica combines distinctive financial and operational strengths with a high-quality team, providing a platform for further returns to shareholders through investment and M&A."
Board member Malcolm Webb - a former chief executive of Oil & Gas UK, now Offshore Energies UK - will lead the hunt for Serica's new permanent CEO, after which he has confirmed he will step down from the company's board after six years of service.
FTSE 100
The UK's flagship share index, the FTSE 100, was up 33-points at 8,078 shortly after opening this morning.
Brent crude oil futures were up 0.29%, trading at $88.68 a barrel.
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