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Highlights:
- Serica Energy temporarily halts Triton FPSO production due to a potential gas seal failure.
- Production halt impacts annual output guidance, though other assets remain on forecast.
- Repairs are underway, with Triton FPSO operations expected to resume by mid-November.
Serica Energy PLC (LSE:SQZ) announced a temporary suspension of production at its Triton Floating Production Storage and Offloading (FPSO) facility following a potential gas seal failure. The issue was identified on October 26, though no hydrocarbon leak occurred, and Dana Petroleum, the operator of the facility, is working on diagnosing and implementing the necessary repairs.
The Triton FPSO plays a significant role in Serica’s output, with the company previously forecasting annual production between 41,000 and 46,000 barrels of oil equivalent per day (boepd). For the fourth quarter, Serica had anticipated reaching approximately 50,000 boepd. However, with the Triton facility offline temporarily, Serica has now adjusted its 2024 output projections to slightly below the previously forecasted range.
Despite the Triton disruption, production across Serica’s other assets remains steady and aligned with initial expectations, demonstrating resilience in the company’s broader portfolio. Serica has benefited from strong gas prices, with October’s average price hitting 97.9 pence per therm, which has supported cash flow even amid the Triton FPSO’s downtime.
Repair efforts at the Triton FPSO are progressing, with Serica indicating that production is expected to resume before mid-November. The restart will be bolstered by the anticipated output from the GE-05 well on the Gannet field, which is expected to come online shortly after Triton’s recommencement.
In light of the production delay, shares in Serica fell 1.6% to 125.25p in Tuesday’s early trading in London, reflecting cautious market sentiment. The temporary setback at Triton underscores the challenges in managing offshore production facilities, although Serica’s diversified asset base and favorable gas prices have provided some stability for the company’s financials.
