Serica Energy PLC (LON:SQZ) has seen its shares flare up after a positive update from its Rhum gas field in the North Sea.

The third well on the site has successfully produced a flow test with results at the upper end of expectations.

It said the flow rate was constrained by the surface well test equipment on board the WilPhoenix semi-submersible drilling rig, and it expected the well to produce at higher rates when in it came into production.

A diving support vessel has been contracted to install the subsea control equipment required so the well can start producing in the third quarter of 2021.

Chief executive Mitch Flegg said: “Operations on R3 have proved more challenging than expected but the skill and dedication of our operational team has enabled us to achieve this welcome result. The volumes flowed during the test are equivalent to over 10,000 barrels of oil equivalent per day which demonstrates the quality of the Rhum asset.

“It was always expected that the flow test results would be constrained by the surface test equipment, but initial analysis of the data recovered indicates that the flow potential of the well is at the upper end of our range of expectations.

“The third Rhum well will enable enhanced production rates from the field and will provide redundancy to support production from the other two Rhum wells.”

The news has lifted Serica shares 6.61% to 125p.

9.16am Furniture group comforted by strong showroom sales

People could not wait to get back into showrooms once lockdown ended and snap up sofas, according to DFS Furniture PLC (LON:DFS).

In a trading update the company said the ten weeks to the end of June – part of its fourth quarter – sales had jumped 92.1% compared to the same period in 2019 (back in the pre-COVID-19 days).

Its online business boomed during the shop closures, up 222% in the third quarter. But this also reflected its investment in online retail.

Chief executive Tim Stacey said: “Despite short-term supply chain challenges and a macro environment that’s hard to read, we believe the business is well set for growth, to be delivered in both a responsible and sustainable manner.  Given our overall financial position and outlook it is our intention to recommend a full year dividend of 7.5p in September.”

The news has lifted the company’s shares by 13.42% to 308.5p.

Elsewhere outsourcer Mitie Group PLC (LON:MTO) saw customers such as Rolls-Royce and Heathrow cut costs, pushing its full year operating profits down from £86.1mln to £63.4mln.

But the company, which specialises in cleaning, security and technical services, said the outlook for 2022 was materially better than its previous expectations.

The acquisition of Interserve was performing well, and it strengthened its balance sheet with a £190mln rights issue.

Chief executive Phil Bentley said: “”Although COVID has challenged us all, our business has been far more resilient than we originally expected, with revenue, excluding the contribution from Interserve, just 1.6% lower than the prior year.  The second half of the year was significantly better than the first half, with 6.5% year on year growth, as variable projects and discretionary spend works picked up and cleaning and security demand increased. 

“As businesses slowly start to reopen and our customers’ employees return to offices, we are starting to see some green shoots of recovery in the variable project and discretionary spend works and we anticipate this continuing as re-occupation plans solidify.  With some high-quality new contract wins, short-term support to the public sector and additional synergies from the integration of Interserve, we now anticipate 2022 will be materially ahead of our prior expectations.”

Mitie is 5.89% better at 75.92p.

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