WTI (Oct) $63.52 +81c, Brent (Oct) $67.67 +83c, Diff -$4.15 +2c
USNG (Sep) $2.83 +8c, UKNG (Sep) 82.61p +2.73p, TTF (Sep) €33.39 +€1.12

Oil price

Oil is quiet today after a positive few days leading up to the Fed meeting at Jackson Hole and with Jerome Powell speaking at 3pm BST.

Apart from that it’s more of the same, Ukraine talks drifting away so probably more sanctions from the US on Russia and India. This was made worse by Russian drones hitting a US owned electronics factory in Western Ukraine…

Serica Energy

Serica has announced the first lifting of oil from the Triton FPSO since the resumption of production is underway.

Production continues to ramp up in line with the previously stated plan, with the restart of production from certain wells on the Bittern field (Serica: 64.6%) having been followed by wells on the Evelyn (Serica: 100%), Gannet E (Serica: 100%), and Guillemot West (Serica: 10%) fields being brought online.

Triton Hub production over the last two weeks has averaged 20,000 boepd net to Serica, a figure that is set to rise as more wells come back onstream as part of the planned start up sequence, including productive wells from the Bittern and Gannet E fields. New wells drilled on the Guillemot North West (Serica: 10%) and Evelyn fields are also scheduled to be brought onstream for the first time.

Total Serica portfolio production averaged over 50,000 boepd in the days ahead of production ramping down at the Bruce Hub for the annual maintenance period, which began as planned on 16 August and is scheduled to last for around 12 days.

Serica retains production guidance for the year of 33,000 to 35,000 boepd.

Serica today brings very good news as the first lifting of oil from the Triton FPSO since the resumption of production is underway. The ramp-up is in line with the plan, restarting certain wells on the Bittern field (Serica: 64.6%) having been followed by wells on the Evelyn (Serica: 100%), Gannet E (Serica: 100%), and Guillemot West (Serica: 10%) fields being brought online.

So far, over the last two weeks Triton production has averaged 20/- b/d net to Serica which will rise as more wells come back onstream as part of the planned start-up sequence which includes the ‘productive wells from the Bittern and Gannet E fields. New wells drilled on the Guillemot North West (Serica: 10%) and Evelyn fields are also scheduled to be brought onstream for the first time’. This guidance put together makes me think that Triton alone can add 30/- b/d which is very impressive and higher than my original thoughts.

So where does that leave us in terms of total Serica portfolio production? Output averaged over 50,000 boepd in the days ahead of production ramping down at the Bruce Hub for the annual maintenance period, which began as planned on 16 August and is scheduled to last for around 12 days.

That works out at the company’s guidance of 33,000-35,000 boepd which seems eminently achievable and accordingly my current TP of 250p is looking like a fairly modest hurdle given current performance. A Bucket List certainty as management at Serica is very impressive and after recent operational problems are showing what a superb portfolio of assets they have. 

Hunting

Hunting yesterday issued an update regarding the restructuring of the EMEA operating segment, which was previously announced in January 2025.

In January 2025, the Group announced that, due to the projected activity in the UK North Sea and likely drilling outlook into the medium term, a facility consolidation and cost reduction plan was required to restore profitability to the segment, focusing future investment and capital into growth regions including the Middle East and Africa. As the restructuring plan has been implemented throughout H1 2025, it has become clear that further cost cutting, and rationalisation of the Group’s European operating footprint is required to ensure long-term profitable operations. 

Therefore, Hunting today announces the relocation and consolidation of its manufacturing footprint from the existing Fordoun Oil Country Tubular Goods (“OCTG”) facility into its Badentoy site, Portlethen, as part of this broader strategic consolidation.

As part of this change, yard services currently offered at the Fordoun site – including storage and inspection – will cease upon the completion of existing customer contracts. Hunting remains committed to ensuring a smooth and transparent transition for all stakeholders.

Hunting anticipates that this further restructuring will deliver annualised cost savings of c.$2 million of which c.50% is expected to be retained as improved profitability. The transfer of production and winding down of services will likely be completed within 12 months. Total annualised savings from the EMEA restructure are now expected to be c.$11 million by June 2026.

Further details will be provided as part of the 2025 Half Year Results, which are due to be issued on Thursday 28 August 2025.

Hunting put this out at 1630 yesterday afternoon which meant that it missed normal market hours and although it may not have contained price sensitive information it does attract attention. I am aware that Hunting is located in the USA and probably wanted to ensure that those directly concerned heard about the news first so probably just an IR glitch…..

The restructuring process in the EMEA area already announced has now been taken a stage further with the closure of the Fordoun site and transfer to Badentoy and upon completion cessation of existing customer contracts yard services such as storage and inspection will end. 

This is another nail in the coffin of the UK energy industry and due to the projected activity in the UK North Sea and likely drilling outlook into the medium term, is a direct result of the UK Government’s banning of drilling in UK waters.

For Hunting it is an appropriate and necessary continuation of the consolidation and cost reduction plan in order to ‘ensure long term profitable operations’. This will come by June 2026 and will give total annualised savings of c.$11m with returns presumably coming through in 2027. 

Whilst this is an unwanted distraction from other dynamic Hunting units such as the Subsea business which is winning contracts and the continued high tech contributions it has to be done but as someone who has visited Fordoun I am nevertheless saddened by the news. I remain very happy overall and my TP of 500p remains intact.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog