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Visitor / New KTOB
The Tailwind 31st December 2021 Accounts have the loan outstanding as $344.599
The loan we take on as part of the December 22 deal is £277m
Based on an exchange rate of 1.2 $/£ the two are broadly similer.
So nothing extra in the box with the exception of Dec 22 and Jan 23 cashflow which makes this deal any cheaper.
So nothing hidden here - its still expensive so why do the big PI's like it !!
Where is it?
Was posted on the 20th January last year, cash rich with the added production surely should lift the SP out of the doldrums, or is that too optimistic!
AA's got enough on his plate to get KIST moving again and I can't believe he would devote his time and resources to the North Sea now and certainly wouldn't come to the rescue here after his last rebuff.
Unfortunately for SQZ SHs Kistos has already stated they are only looking at opportunities outside of holland and the UK which is not what I would like to hear as an SQZ SH but as a Kistos SH I agree 100% with this decision one of the many companies using their brain and basic arithmetic.
Unfortunately a takeover is now no more than fantasy for the reason already given, as I stated before Mercuria have SQZ by the B**ls.
IMO KIstos will do well under AA and Mercuria will do very well with SQZ but the SH of SQZ will not be doing so well as reflected in current SP , I hope I am wrong and there is great hidden value in the deal that some have stated but none have seen.
Will sell on a high or when I want to use the capital losses, there should be plenty of opportunity to uses these losses with the reduction in CBT allowances coming in the near future.
No.
...............
Banburyboy - after receiving clarification, my initial suspicion regarding carve-outs and caveats from "leakages" and your post that TAIL 2021 div paid on 12 Jan 2022 is probably out of scope is indeed correct. So the whole lockbox date and leakages can broadly be disregarded, wont change the valuation and calcs we've all done here, why we came to our individuals decisions etc.
Visitor - good post. I have completely overlooked the point that the reference date for the debt was Nov 22 and as you say that should reflect cash generated in the previous 11 months.
The fact that the lock part starts from an earlier reference point than the agreed net debt is somewhat bizarre.
The dividend paid out in 2022 was in relation to the Tailwind 2021 year so is probably out of scope.
Logically you would expect closing debt to have fallen materially from Jan 22 to the Nov agreed figure to reflect 11 month cash generation.
But who knows with this deal .
At least that’s a big £2 million sell out of the way.
I was day-dreaming of us having a VAST time, +300% in two days off 12 month low !!! Then Kylie rode in, full Lady Godiva style, "I Should Be So Lucky"..... !
Come on Mr Market, you know Mercuria's plan now so lets have at least a glimmer of our re-rate.
aimo & dyor
NoQuestionMarks, I'm sure BOD will try and get their hands on some of BP's assets at favourable valuations (to BP). After all BOD have recent form in negotiating deals that are favourable to the vendor.
Apologies for my cynicism which appears to betting worse with age. But remember a cynic is a man who know the price of everything and the value of nothing.
I'm going into mourning about all this now so will keep quiet for a while in case anybody thinks I've got an attack of the sour grapes
I agree it is protection in one sense, but also a handbrake on progress given the risk-free rate is lower than our ROC and that represents a massive opportunity cost.
Dana operate the Triton FPSO and they have been trying to sell their UK assets for a while.
NKOTB,
BP has plenty of superb assets that I hope we can get our hands on at favourable valuations.
I am simply looking for further rationale for the Tailwind transaction, picking up the rest of the hub is the only one that strikes me as mildly positive.
I forgot to list Bittern as the other Triton hub asset that we could acquire from KNOC and Waldorf.
We would then own 100% of the licences and 100% of the FPSO.
It doesn't make the deal 'a good one' but it would make more sense if we were to proceed with mopping up the Triton assets
https://www.offshore-technology.com/marketdata/bittern-conventional-oil-field-uk/
NQM,
For sure deals will follow, just how much will they 'cost' us SH is the question.
Yes, picking up more of Triton would make sense but I see SQZ taking over un-wanted BP's assets first both NS and world-wide.
aimo & dyor
Banbury - cash generated since 1st Jan 2022 is not the important metric, as we already know net debt was £277m in Nov 2022. The only metric that changes any valuation of this acquisition is "leakage".
We already know a huge dividend of $95m was paid on 12 Jan 2022 straight after the lockbox date. Based on very limited knowledge of "leakage" in the circular (in legal terms, we are provided no real definition of leakage), most investors would assume this $95m would class as a "leakage" and will be paid back by Mercuria to Serica. Unless the SPA has a far more detailed definition of "leakage" with caveats and carve-outs? It seems bizarre that a leakage that happened over a year ago and known, is not taken account in the final agreement in Jan 2023. For example, why is SQZ paying TAIL £61m (£57m + interest), when there is already a known leakage of $95m as far back as 12 Jan 2022, a year before the final agreement is drawn up.
The other question is has there been any other leakages from Jan - Nov 2022 impacting TAIL's Net Debt metric of £277m? All other metrics are known so does not matter if there is any leakage post Nov 2022, as we have £277m Net Debt baseline to work with and TAIL's production numbers and cost per boe thereafter.
Maybe now is the ideal time to buy the remaining Triton hub assets.
52% of the Triton FPSO from KNOC and the other 2% from Waldorf.
90% of Guillemot West from KNOC
90% of Guillemot North West from KNOC
As operators and 100% equity owners we would receive full benefit of any efficiencies, field life extensions and tax allowances.
Erskine 2.0?
https://www.offshore-technology.com/marketdata/guillemot-west-conventional-oil-field-uk/
https://www.offshore-technology.com/marketdata/guillemot-north-west-conventional-oil-field-uk/
We still have cash, could be a good NS golden egg..
Loving that purchase of a single share at above the current rate earlier today. "I've put 10k in your account to use to support the price of SQZ - do what you can. Yes I know I should have read the stuff from Mitch about the deal before I told the boss that we should support , but WE need it to not sink otherwise he might go and look at the chat boards and then it will hit the fan. And if I go, i'm taking you with me. Work with a couple of your mates, there are others in the same position. Come back to me if you need a bit more."
sadly North Sea is now a Red Flag for any investors except, of course, Serica who not only have acquired another North Sea operator to boost their exposure in this area when savvy companies with alert BODs are doing the opposite.
Just my opinion of course and what do I know
Have you looked at the markets today and our share price to see what they think about the crummy deal you negotiated on behalf of the shareholders you're meant to represent?
*1st January 2022
Cnooc’s $3 Billion UK Portfolio Sale Has Stalled on Valuation Gap .....
"Cnooc Ltd. has paused a planned sale of its UK North Sea portfolio, which could have been valued at as much as $3 billion in a deal, according to people familiar with the matter.... from initial $10 billion sought by the sellers"
https://uk.finance.yahoo.com/news/cnooc-3-billion-uk-portfolio-033359007.html
Yet Serica manage to do a deal that pays a premium to the seller ...
aimo & dyor
Zebo two considerations for me
- the surge in Tailwind production continues
- the locked box has Tailwind cash generated from 1st Jan 2021 In it. £150m would seem reasonable.
If both happen £3.50 possible but no guarantees
Re rate will be interesting and from what level will we re rate ....any ideas