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Https://www.investormeetcompany.com/meetings/full-year-results-139
Very true Maverick7,
David also referred to Kistos as a 'Gas' company.
Not true. Current split is roughly 60% gas 40% oil.
Kistos are operators in Norway, The Netherlands and the UK. Gaining this status in Norway is particularly onerous.
Serica definitely feel threatened by AA, to the detriment of us as investors.
aimo
Interesting that they were quite dismissive about KIST and i thought i heard them say that they were a small company lol. Which i guess they are based on production verses SQZ, however, they are debt free, growing production and probably have more net cash than SQZ imho. Feels like there is still some bitterness from AA trying to takeover SQZ.
I heard Martin state that the TW tax losses available to us were £470m on acquisition, of which £395m are still available to us. He said to expect a lot more to be utilised in the following year.
Good news.
aimo dyor
Both David and Martin came over well, particularly David.
Meeting over .
Mercuria are very supportive and welcome shareholder who operaste globally and can provide help with M&A and provide opportunity if it suits SQZ business model and are in place to help grow SQZ
Question re dividend payment for future ? Bod respond with , clealry depends on cash flow, however, we are far from a oil/gas price that means divi is likley to be impacted.
Mich left as all agreed SQZ is on verge of growing bigger and likely beyond the UK and time to refresh the board ready for the new ventures etc
Meeting notes (wrote as the spoke, so forgive any spell errors)
''Performance so good against backdrop of lower gas prices and high tax, however, we can pay 14p final divi (4% increase) and share buy back, displays confidence in expected cash flow for 2024.
Tailwind brought in oil , essential for keeping cash generation as gas prices plumetted, Oil a great addition
Reserves grown
Production ytd 45000 - guidance 41000 -46000
Well drill programme 2024 expected to be short pay back times
Tax will be less as investment programme covered by offsets.
lower gas and oil prices for 2023
$19 dollar a barrell average cost and under the target of $20 achieved
Tax rate effective of 48% for year (afdter off sets etc)
Bank facilities allow growth etc
decommisioning cost less than peers and advantageous in current tax regime
Dividend cover and cash flow meet current levels
Capex expected to qualify for full tax relief in 2024
Expect to see more benefits of Tailwind tax losses through 2024
Windfall tax is not reflective of oil/gas prices as far from windfall prices
Investing in UK is not for now unless right opportunity arrives, looking outside UK for the right opportunity, will not rush, Norway in focus currently but will take time.
Business in good shape and aim to continue to offer good share holder returns ''
These guys know their business, better than many of us posters imo and sp does not reflect the sp metrics imo and clearly Oil has been a major benefit rather than remaining as just a gas company
Https://www.serica-energy.com/downloads/presentations/AR_2023_final.pdf
Broker note -
The Company announced an inaugural £15m share buyback in addition to the final FY23 dividend of 14p/sh, which combines for a total implied annual shareholder return of ~13%.
Cash resources more likely to be redeployed out of the UK.
We think Serica’s strategy has changed following the merger with Tailwindnd and the new management team are more comfortable investing in larger more long-term development projects to make use of EPL offsets for new investments.
A reasonable update but a disappointing market response. Glad that the dividend has been maintained but I guess the SP isn't going to shift much without a step change in UK taxation or overseas diversification (which should now be the priority).
Agree with this apart from the last sentence re Politicians! :-)
Agree with that, Maverick, after a cursory read; it seems the best from Serica is now historic with just about every outcome lower than before and ahead of Labour's intentions which they seem oblivious to, if they get in, the divd prop will likely decline, too.
'Twas good while it lasted... sasa.
Happy enough with results, great deal of information and dividend secure. You can see the way the company is heading - Norway being of particular interest. Will continue to accumulate KIST and LBE in the off chance.
Nice to see that ACW has kept his shares (below 3%) in his baby.
Bought KIST and BP when we were at 170p, which have increased by 15% and 18% so puts a bit of perspective on our sp.
Still hanker for Andrew Austin to merge with ourselves - Ithaca showing the way - now when are these inept politicians going to see and hear factual communique rathe than keep reiterating we need to tax BP and Shell more.
Keep the faith, tides turning.
Kist sp down 49 percent last 52 weeks
Sqz sp down 22 perc ent in last 52 weeks
I own both and currenly SQZ has the more optimistic outlook, provides a very healthy dividend (14p final), Kist no divi, share buybacks starting that will improve eps and SQZ exploring opportunities beyond the UK tax grab whilst they can also use tax losses and their short term business model to maximise existing North Sea assets. A new CEO expected to be announced shortly, a new direction in addition to UK and importantly SQZ has oil. It provides an optimistic outlook imo and SQZ metrics look very attractive too.....we all have different takes, it's what makes a market, however, despite the negativity noise by some and forecasts of doom, SQZ finds itself in a decent position providing very decent divis with the prospect of an increasing sp moving forward. Cash in the bank is handy, generating cash and providing returns with plans for growth is also attractive.
I thought I read somewhere that they are expecting a tax rebate this year!!
Fwiw. I bought some back today. My view is that even with Labours fret of over eighty percent tax we will still be profitable. Manly due to utilising tax losses. We then have the heightened possibly of a merger/acquisition involving overseas assets. Also the way politicians are they may even do an about turn and reduce the levy due to national security etc.
Does this RNS and share buy back get me to buy back into SQZ - nope, net cash is way lower than expected, i would of expected the combined group to have higher production, is a progressive dividend really safe, debt laden, not enough net cash to make any meaningful acquisition and Labour gunning for more cash from oil and gas.
It will be interesting to see how KIST end of year results stack up with SQZ, where they have lower production - i bet they have a lot more cash
SQZ currently up 6% looks like positive response from investors old & new!
NQM,
I see your point and agree, however as you and I know, PE like to extract as much cash as possible and load up debt. I fully expect dividends to continue to be maxed out whilst our drawdown on the RBL jumps significantly this year.
Mitch's last day today as CEO, new M&A on horizon that comes with new CEO, AA maybe !
ps Mr Market this morning certainly likes our direction of travel.
aimo & dyor
Disappointed this was mentioned in the outlook
It’s supposed to be a drill of significant importance
NKOTB,
Over £200m of that is owed in debt.
I should have been clearer, net cash in excess of £100m is where I would like us to be.
NQM,
Cash "of £291.0 million at 31 December 2023..." so still plenty of opportunity for cash deals.
aimo & dyor