Serica Energy : Results for the six months ended 30 June 2023

Serica Energy plc

("Serica" or the "Company")

Results for the six months ended 30 June 2023

London, 19 September 2023 - Serica Energy plc (AIM: SQZ), a British independent upstream oil and gas company with operations in the UK North Sea today announces its financial results for the six months ended 30 June 2023. The results are included below and copies are available at www.serica-energy.comand www.sedar.com.

Commenting on the results, Mitch Flegg, Serica's CEO stated:

"The completion of the Tailwind acquisition in March represented a step change in the scale and diversity of Serica, achieving a longstanding strategic goal. We have stated consistently our intention to continue investing in the enlarged portfolio, to add to it in a disciplined fashion if the right opportunities arise and to make further cash returns to shareholders. Accordingly, we look forward to near continuous well and drilling activity across the Bruce and Triton hubs during the next eighteen months and are pleased to announce today an interim dividend of 9 pence per share. This is up from 8 pence per share for the interim dividend in 2022, following the full year dividend of 22 pence per share last year.

Serica's current circumstances and optimism reflected in its investment plans should not mask the fact that we share the widespread concerns within the sector about the health of the UK's offshore upstream industry given the current fiscal regime and future uncertainties. We welcome the UK government's recent Call for Evidence regarding long term fiscal policy. However, the problems we see need to be addressed urgently in order to restore confidence in the sector."

First Half 2023 Highlights

• Completed acquisition of Tailwind Energy Investments Limited on 23 March 2023 increasing 2P reserves to 130 million boe (pro forma as at 31 December 2022).
• Combined portfolio produced 49,350 boe per day on a pro forma basis (1H 2022: 38,100 boe per day) balanced between gas (55%) and oil (45%).
• Carbon intensity (kg of CO2 per boe) of production from Bruce and Triton hubs lower in 1H 2023 than 1H 2022.
• Profitability maintained with higher sales volumes largely offsetting lower gas prices.
• Highly cash generative portfolio of assets. Cash flow from operations of £266 million (1H 2022: £267 million) contributing to gross cash of £444 million as at 30 June 2023 after tax payments of £141 million, net cash outflow of £44 million arising from the acquisition of Tailwind Energy and reduction of £48 million in debt acquired with Tailwind.
• Net cash of £234 million as at 30 June 2023.
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• Average realised gas price of 96 pence per therm (1H 2022: 136 pence per therm)
  and realised average oil price of US$64 per barrel (1H 2022: US$108 per barrel).
• Average operating cost per boe of US$17.5 (1H 2022: US$16.1 per boe).
• Operating profit £159 million (1H 2022: £196 million).
• Interim dividend of 9 pence per share (2022: 8 pence per share) announced today following the full year dividend of 22 pence per share for 2022. The interim dividend is payable on 23 November to shareholders registered on 27 October 2023 with an ex-dividend date of 26 October 2023.

Outlook

• Work on multiple Bruce and Keith wells being undertaken during remainder of 2023 and in 2024 to boost production performance.
• Four-wellTriton hub drilling campaign sanctioned for execution in 2024. Rig option exercised for 5th well in 2025.
• Progress towards development of Belinda field with submission of draft FDP to NSTA. Decision not to undertake further drilling on North Eigg.
• Production guidance for 2023 amended to 40-45,000 boe per day due to slower than expected ramp up of production from Bruce and Triton hubs following planned summer shutdowns. Group operating costs expected to remain below US$20 per boe.

A meeting with sell-side analysts will be held today at 10:30am BST. If you would like to participate, please email [e-mail].

Investor Presentation

Mitch Flegg will provide a live presentation relating to the interim results via the Investor Meet Company platform today at 1.30pm BST.

The presentation is open to all existing and potential shareholders.

Investors can sign up to Investor Meet Company for free and add to meet Serica Energy plc via:

https://www.investormeetcompany.com/serica-energy-plc/register-investor

Investors who already follow Serica on the Investor Meet Company platform will automatically be invited.

A copy of the accompanying presentation can be found on our website: www.serica- energy.com.

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Regulatory

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

The technical information contained in the announcement has been reviewed and approved by Fergus Jenkins, VP Technical at Serica Energy plc. Mr. Jenkins (MEng in Petroleum Engineering from Heriot-Watt University, Edinburgh) is a Chartered Engineer with over 25 years of experience in oil & gas exploration, development and production and is a member of the Institute of Materials, Minerals and Mining (IOM3) and the Society of Petroleum Engineers (SPE).

Enquiries:
Serica Energy plc	[phone]
Mitch Flegg (CEO) / Andy Bell (CFO)
Peel Hunt (Nomad & Joint Broker)	[phone]
Richard Crichton / David McKeown
Jefferies (Joint Broker)	[phone]
Tony White / Will Soutar
VIGO Consulting	[phone]
Patrick d'Ancona / Finlay Thomson	[e-mail]

NOTES TO EDITORS

Serica Energy is a British independent oil and gas exploration and production company with a portfolio of UKCS assets.

Serica completed the acquisition of the entire issued share capital of Tailwind Energy Investments Ltd on 23 March 2023.

Following the addition of the Tailwind assets to its portfolio, Serica has a balance of gas and oil production. The Company is responsible for about 5% of the natural gas produced in the UK, a key element in the UK's energy transition.

Serica's producing assets are focused around two main hubs: the Bruce, Keith and Rhum fields in the UK Northern North Sea, which it operates, and a mix of operated and non- operated fields tied back to the Triton FPSO. Serica also has operated interests in the producing Columbus (UK Central North Sea) and Orlando (UK Northern North Sea) fields and a non-operated interest in the producing Erskine field in the UK Central North Sea.

Serica's portfolio of assets includes several organic investment opportunities which are currently being pursued or are under consideration.

Futher information on the Company can be found at www.serica-energy.com. The Company's shares are traded on the AIM market of the London Stock Exchange under the ticker SQZ and the Company is a designated foreign issuer on the TSX. To receive Company news releases via email, please subscribe via the Company website.

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INTERIM REPORT FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2023

The following Interim Report of the operations and financial results of Serica Energy plc ("Serica") and its subsidiaries (together the "Group") contains information up to and including 18 September 2023 and should be read in conjunction with the unaudited interim consolidated financial statements for the period ended 30 June 2023, which have been prepared by and are the responsibility of the Company's management.

References to the "Company" include Serica and its subsidiaries where relevant.

The results of Serica's operations detailed in the interim financial statements are presented in accordance with International Financial Reporting Standards ("IFRS").

The Company's shares are listed on AIM in London. Although the Company delisted from the TSX in March 2015, the Company is a "designated foreign issuer" as that term is defined under National Instrument 71-102 - Continuous Disclosure and Other Exemptions Relating to Foreign Issuers. The Company is subject to the regulatory requirements of the AIM market of the London Stock Exchange in the United Kingdom.

Serica is an oil and gas company with production, development and exploration activities based in the UK.

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CHIEF EXECUTIVE OFFICER'S REVIEW

The acquisition of Tailwind Energy Investments Ltd, which completed in the first half of 2023 has provided operational diversity and scale for Serica. This transaction is outlined in the section following this review.

Serica's production levels in the first half of 2023 continue to benefit from the ongoing capital investment campaign which has been in progress for the last few years. We can also see the benefit of the investment in the Tailwind portfolio over a similar period. As a result of these investment projects, the net production from the combined portfolio in the first half of 2023 was 49,350 boe/d, an increase of 30% compared to the 38,100 boe/d from the same portfolio in 1H 2022 and an increase of 85% compared to the Serica net production of 26,600 boe/d in 1H 2022.

In the first half of 2023, 55% of the production from the combined portfolio was gas compared to 91% of the Serica portfolio on the first half of 2022.

Market gas prices, though still volatile, have averaged around 108p/therm in the first half of 2023 compared to over 175p per therm in the first half of 2022. Market oil prices have averaged around US$79/bbl in the first half of 2023 compared to around US$107/bbl in the first half of 2022. These are before the impact of Serica's commodity price hedging programmes.

With lower commodity prices but markedly higher production levels, Serica's sales revenue for the six-month period to June 2023 was £340.6 million, broadly similar to the figure of £353.5 million for the corresponding period in 2022. The profit after taxation for the period was £175.5 million (1H 2022: £116.7 million) but this is significantly influenced by a one-offnon-cash accounting entry related to the Tailwind acquisition. These numbers incorporate contributions from the acquired Tailwind assets from the completion date of 23 March 2023 rather than the full six-month period.

The UK Energy Profits Levy (EPL) has a significant impact on post-tax profitability for all UK oil and gas producers. However, the substantial tax losses acquired with the Tailwind transaction have had the effect of lowering Serica's effective rate of taxation. The EPL is a wholly unwelcome burden that is already leading to the delay and cancellation of longer-term investment projects across the sector. However, allowances relating to reinvestment in short-cycle projects offer Serica the opportunity to mitigate its impact. Therefore, we will maintain our ongoing short-cycle investment plans and where possible will expand and accelerate elements of that programme.

The Company is therefore continuing with its growth strategy of investment in projects designed to enhance and extend future production profiles. Following the success of last year's Light Well Intervention Vessel ("LWIV") programme on Bruce, a second campaign has now commenced, and a third campaign is scheduled for the first half of 2024. A significant four-well drilling campaign in the Triton Area is expected to commence early in 2024. This will comprise of wells on Bittern, Gannet E, Guillemot NW and Evelyn.

The common theme amongst these capital projects is that they are all designed to quickly add production from existing fields without the requirement for substantial new infrastructure. These short-cycle investments benefit from Investment Allowances under the EPL and have the capability to add significant reserves and production. Serica has a strong record of replacing reserves through our ongoing investment commitment. At the end of 2022 the Serica net 2P reserves stood at 74.9 mmboe which is a 9% increase on the level at the time of the BKR acquisition more than four years previously despite the production of over 30 mmboe in the intervening period. The combined net 2P reserves for the Serica and Tailwind portfolios at the end of 2022 were 130.4 mmboe.

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