Serica Energy plc (AIM: SQZ) recently faced a hurdle in its production operations at the Triton Floating Production Storage and Offloading (FPSO) facility. An unexpected technical issue with the gas compressor halted production, shaking up the company’s plans for the year.
Here are the key takeaways from this incident and Serica Energy’s response:
- Production Setback: The ‘A’ gas compressor at the Triton FPSO experienced a dry gas seal failure on October 26, prompting the need for immediate attention. Dana Petroleum, the FPSO operator, confirmed that no hydrocarbon leaks occurred as a result of this mishap. The company is currently evaluating the extent of the damage and making arrangements for repairs.
- Revised Production Forecast: Serica had initially set its sights on producing between 41,000 to 46,000 barrels of oil equivalent per day (boepd) for the full year. However, due to the Triton FPSO downtime, achieving these levels is now in question. The company anticipates a slight dip in production below the previously mentioned range.
- Operational Measures: To counterbalance the production loss, Serica is planning to activate a second compressor at the Triton FPSO. However, the repair work on the malfunctioning ‘A’ compressor may delay this implementation until the first quarter of 2025. These operational adjustments aim to mitigate risks and resume normal production levels.
- Market Performance: Despite the challenges faced at Triton, Serica’s overall portfolio is faring well, particularly with the surge in gas prices. The current gas price of 97.9 pence per therm represents the highest level witnessed in 2024 so far. This positive market trend is contributing to the company’s cash flow stability.
- Future Outlook: Looking ahead, Serica plans to provide a comprehensive trading and operations update in mid-November. By then, production at the Triton FPSO is expected to be back on track. Additionally, the company is gearing up for the commencement of production from the GE-05 well on the Gannet field shortly after Triton’s recovery.
In conclusion, while facing unforeseen obstacles at Triton, Serica Energy remains focused on overcoming challenges, ensuring operational efficiency, and staying on course to meet production targets. Stay tuned for further updates as the company navigates through this phase of recovery and growth.
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