Serica Energy Secures $750 Million Six-Year Reserves-Based Lending Facility with 11-Bank Syndicate

Details of Serica's $750 Million RBL Refinancing and Syndicate Composition

Serica Energy has secured new reserves-based lending facilities totaling $750 million, consisting of a $500 million secured revolving loan and a $250 million secured revolving letter of credit facility, both with six-year maturities. This refinancing significantly expands capacity from the prior $525 million RBL. The facilities were oversubscribed, underscoring strong lender confidence in Serica's cash flow and asset quality.

The syndicate includes 11 leading international banks, retaining all previous lenders and adding new banking partners. Deutsche Bank, DNB, and ING served as structuring and coordination banks, managing the refinancing process. The new facilities offer improved pricing and extended maturity compared to the previous arrangement, reflecting favorable market conditions and Serica’s enhanced operational performance. CFO Martin Copeland emphasized the robust lender support, highlighting the strengthened financial flexibility from both existing and new banking relationships.

Balance Sheet Strengthening: Cash Generation and Liquidity Position

Serica’s financial health has improved markedly due to strong production and elevated commodity prices in H1 2026. Cash holdings rose to $326 million as of 30 June 2026, up from $31 million at year-end 2025. This turnaround led to a net cash position of $26 million as of June 2026, a reversal from the $200 million net debt at December 2025, reflecting operational success across its North Sea portfolio amid favorable market conditions.

The new RBL facilities further enhance liquidity, with pro forma total liquidity of $784 million as of 30 June 2026, including the borrowing base. The $500 million loan facility will initially remain undrawn following the April 2026 $300 million five-year senior unsecured Nordic bond issuance, which was used to repay outstanding debt and optimize capital structure. Additionally, an accordion feature provides potential access to an extra $750 million in borrowing capacity ($500 million loan and $250 million letter of credit). This flexibility allows Serica to respond opportunistically to capital needs without refinancing.

Extended Debt Maturity: No Amortization Until June 2029

The refinancing establishes an extended debt maturity profile with no amortization required until June 2029, combining the six-year RBL and five-year Nordic bonds. This structure grants Serica strategic flexibility to allocate capital toward organic growth and M&A opportunities without near-term refinancing pressure, a significant advantage amid selective North Sea investment prospects.

The loan facility is priced at SOFR plus 3.50%, representing improved terms. The RBL includes standard market provisions such as minimum hedging linked to drawings, semi-annual borrowing base redeterminations, and a springing maturity aligned with the Nordic bond maturity. These provisions balance lender protections with operational flexibility, enabling Serica to pursue capital investments unencumbered by imminent refinancing constraints.

Serica’s UK Continental Shelf Asset Portfolio and Production Overview

Serica operates a diversified oil and gas portfolio across the UK Continental Shelf, producing roughly 10% of the UK's gas. The company maintains a balanced oil and gas output, supporting resilience across commodity cycles. Key assets include operated fields in the Northern North Sea (Bruce, Keith, and Rhum) and interests in operated and non-operated fields connected to the Triton FPSO in the Central North Sea.

Strategically, Serica holds a 40% operated stake in the Greater Laggan Area West of Shetland, including the Shetland Gas Plant infrastructure. The company is advancing the acquisition of additional assets from Spirit Energy, expected to close by Q3 2026, comprising a 15% stake in Cygnus, 25% in Clipper South, and the operated Greater Markham Area. Since 2020, Serica has invested over a31 billion in the UK supply chain, underscoring its commitment to North Sea operations and UK energy infrastructure. This diversified and operator-led portfolio positions Serica as a significant independent UK upstream producer.

Capital Allocation Strategy and Organic Growth Initiatives

Serica’s capital strategy focuses on shareholder value through production from existing fields, organic development projects, and M&A. At its May 2026 Capital Markets Day, management highlighted multiple organic growth opportunities, with rig contracting underway for select projects. The extended debt maturity and strong liquidity from the new RBL enable disciplined investment in these initiatives.

CFO Martin Copeland emphasized that refinancing supports growth ambitions and shareholder value maximization through both asset development and selective M&A in the North Sea. The substantial undrawn liquidity and absence of debt amortization until 2029 provide operational flexibility to pursue investments and acquisitions at attractive valuations, reflecting confidence in Serica’s cash flow and asset quality.

Lender Syndication and Advisory Roles

The $750 million RBL refinancing was led by Deutsche Bank, DNB, and ING as structuring and coordination banks, securing commitments from 11 international lenders. The inclusion of all prior lenders alongside new banks demonstrates strong market confidence in Serica’s creditworthiness and operational performance. Oversubscription further indicates robust lender appetite.

Legal counsel was provided by Burness Paul LLP for Serica and Bracewell LLP for the lenders. Financial advisory services were supplied by Lambert Energy Advisory Ltd. The involvement of specialized legal and financial advisors highlights the transaction’s complexity and strategic importance.

Refinancing Timing Aligned with Commodity Price Strength and Cash Flow

Serica’s refinancing in H1 2026 capitalized on strong production and elevated commodity prices, generating significant cash flow. Proceeds from the April 2026 Nordic bond issuance were used to repay debt, enhancing liquidity before completing the RBL refinancing. This timing reduced refinancing costs and boosted lender confidence.

The sequential capital markets transactions—Nordic bond issuance followed by RBL refinancing—reflect prudent financial management, optimizing capital structure and extending debt maturities. This strategy positions Serica for sustainable capital deployment amid operational and market strength.

Transition to London Stock Exchange Main Market and Investor Profile Enhancement

Currently listed on the AIM market under ticker SQZ, Serica plans to transition to the LSE Main Market in 2026. This move is expected to increase institutional investor access, broaden the shareholder base, and enhance market visibility. The refinancing and improved financial metrics support this strategic development.

The Main Market transition marks Serica’s maturation as a North Sea operator since emerging from Cairn Energy in 2017. Delivering about 10% of UK gas production and operating multiple significant fields, Serica’s enhanced financial profile and refinancing position it well for increased institutional investor engagement.

Sector Dynamics Underpinning Refinancing Success and Investor Confidence

Serica’s refinancing success reflects broader positive trends for UK Continental Shelf operators. North Sea assets have proven resilient and value-accretive during commodity price upswings, as demonstrated by Serica’s H1 2026 cash generation. Energy security concerns and UK government support for North Sea development, balanced with transition goals, provide regulatory clarity and investor confidence.

The refinancing underscores the investment case for disciplined North Sea operators with material reserves, strong production platforms, and strategic capital allocation. Serica’s combination of cash-generating assets, development projects, and M&A opportunities positions it to deliver shareholder value across cycles. The 11-bank syndicate’s commitment evidences confidence in Serica’s business model and execution capabilities amid selective investor appetite for North Sea exposure.