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NewKOTB, I understand your logic, but I think that we are far too close to the election for HBR to take a gamble on whether or not Labour will do as they predict or not. It's a gamble that they don't need to take. Also any package of NS assets at the moment is not overly enticing. Time will tell and no doubt many surprises in the meantime,
Rellim,
HBR could easily make SQZ an offer and by utilising our corp tax losses alone would make good business sense given combined production HBR profit before and after tax could look totally different.
“Profit before tax reduced to $600 million, from $2.5 billion, and after-tax adjustments the company reported a $32 million profit..” for HBR
Should Labour not carry out their threat to close the “loophole” HBR could then package all NS assets circa ~200kboepd for a tidy sum and fully exit UK. But as you rightly stated, HBR may well have enough to be going on with atm.
aimo & door
Atb
ENERGY VOICE 07/03/2024
‘Not windfall conditions’: Serica boss hits out at EPL tax extension
Serica Energy CEO Mitch Flegg has criticised the Chancellor’s decision to extend the windfall tax on North Sea producers.
In a trading update, he said current oil and gas prices “do not represent windfall conditions” and the effect will be greater imports, leaving the UK less resilient.
Chancellor Jeremy Hunt unveiled a year-long extension to the windfall tax, known as the Energy Profits Levy (EPL), during Wednesday’s Spring Budget, bringing the “sunset” to 2029.
Investment incentives remain, meaning it “could have been worse” as one source told EV, however the fourth tax change in two years now makes it “impossible” to plan investment according to trade body OEUK.
Mr Flegg of Serica Energy said: “It would be remiss not to express considerable disappointment with the extension of the EPL announced in the Budget yesterday.
“Current oil and gas prices do not represent windfall conditions for UK producers and increasing the tax burden on domestic oil and gas production again will be damaging for UK jobs and the economy.
“The achievements delivered by Serica have added to domestic sources of energy. The kind of approach exhibited in the Budget will lead to more imports and reduce the ability of our industry to enhance the UK’s resilience to potential energy shocks in the future.”
Boost to reserves
Serica Energy’s (LON: SQZ) trading update highlighted a 10 million boost annual to reserves as of 31 December to 140m barrels of oil equivalent.
That follows Serica’s recent acquisition of Tailwind Energy.
Mr Flegg said nearly all of the reserves additions are from fields which are already producing, limiting its incremental emissions.
“Production in the early part of 2024 has been encouraging and we look forward to the future impact of executing our investment programme this year. We are on track to commence the planned well intervention and drilling activities on the Bruce and Triton assets during the coming month,” he added.
https://www.energyvoice.com/oilandgas/north-sea/549550/serica-energy-windfall-tax/
I was under the impression that not only had the horse bolted, but some b*gger had half-inched the door too.
Not complaining mind, I'm b*lls deep in this mire
Jumping Jehosephat, what's going on?
Since when do we do share price increases? This has taken me quite by surprise, and will need to go lie down in a darkened room, and perhaps a strong cup of sweet tea
NewKOTB. I reckon HBR have their hands full and at the moment will be totally concentrating on their takeover of Wintershall, a company many times their own size. A brilliant piece of business incidentally. Also she has already stated that the NS at the moment is a no go area for them so I don't think they will pass more than a cursory glance over SQZ. Despite today's drop over there I am totally happy with their results and Divi
Or the CFO & Neds are under pressure from Monsieur Flegg to get buying in order to get his recent share purchases in profit!! He’s not comfortable being down on his buys… 💰
With you on that Newkotb. Harbour takeover would be nice and as you say the political landscape will be quite different in five years time. I wonder how they will explain to the electorate that UK has hardly any north sea production left and needs to purchase most of its needs overseas. Let alone the job losses which would have occurred by then.
Wishful thinking is always welcome… and sometimes out of the blue RNS’s do occur so who knows!!
Something has kicked off this sudden buying spree by board and Ned’s or could simply be once we hold / increase our dividend next month on results then reality will kick in on how undervalued we are. Atb
Aimo & dyor
I am just idly wondering if Serica are concerned about a predator circling. The reserves report AND a Director buy intended to support the sp as a deterrent?
Probably wishful thinking!
CFO Martin Copeland Share Putchase..
19000 shares @ 179.2p
Initial interest
HBR announced today:
“ § Proposed final dividend of $100 million, in line with $200 million annual dividend policy and equating to 13 cents per share (2022: 12 cents), reflecting dividend per share growth for the full year 2023 of c.9%…”
The good thing about extending the EPL is it has no relevance for another 5 years, by which time the economic and political landscape will have changed for sure…. As Upomega has mentioned many times before, the NS players should do all they can to reverse the impact, be it lobbying at the very least to closing down investment and moving overseas and listing in US. Every other sector can produce mega profits off the back of world turmoil yet O&G for some reason appears an easy political target. Ps love your subject title Upomega ….
So we added another 10mmboe reserves over and above production. 140mmboe x $10 is $1.4bn, plus Net cash and the $billions$ in currently available tax losses and I’m sure Mercuria is more than happy with our current SP … we need someone like HBR to make an approach. Ridiculous SP atm although we do really need to retain our dividend, any cut would be yet another blow for investors and sentiment especially.
Aimo & dyor
Hmm... wondered why there were so many large buys after trading in the last couple of days, leaky serica!
Why a production update when the year end results are due next month, is someone getting spooked with the recent decimation of the SP ?
About time the EPL was ridiculed by the company, although smirky and no balls hunt will take no notice.
Would be nice if this was listened to by those in Government!! but at least Mitch came out & said it ✅
‘It would be remiss not to express considerable disappointment with the extension of the EPL announced in the Budget yesterday. Current oil and gas prices do not represent windfall conditions for UK producers and increasing the tax burden on domestic oil and gas production again will be damaging for UK jobs and the economy. The achievements delivered by Serica have added to domestic sources of energy. The kind of approach exhibited in the Budget will lead to more imports and reduce the ability of our industry to enhance the UK's resilience to potential energy shocks in the future."
2023 Year End Reserves and 2024 Production Update
1]
· Net Proved plus Probable ("2P") reserves at 31 December 2023 of 140 million boe, up 10 million boe from 130 million boe at 31 December 2022 despite producing 14 million boe in 2023 on a proforma combined Serica and Tailwind basis
· Overall 2P reserves additions of 24 million boe during 2023 representing a reserves replacement ratio of 179%[2]
· Over 90% of 2P reserves in fields that are already in production
· Even split of oil and gas reserves
· Average net production in January and February 2024 about 45,500 boe per day
· Production guidance for 2024 remains at 41,000 to 48,000 boe per day
Mitch Flegg, Chief Executive of Serica, said:
"I am delighted that Serica has maintained its record of more than replacing reserves since 2018, with the company ending 2023 with higher reported reserves than from the combined Serica and Tailwind portfolios at the start of the year even after allowing for the oil and gas we produced in 2023. Nearly all the additions to reserves reported today are associated with fields that are already producing which limits incremental emissions. This record of delivery is a testament to the hard work of our staff and the underlying quality of the asset portfolio.
Maybe hmg see something looming. I .e another spike in oil and gas prices,but this time it lasts a lot longer. Be it through wars, weather, natural disasters etc.
So just maybe they do see something the rest of us do not. Could be the oik is in on it as well.
Three days on the bounce these size UT trades , always a couple of same size trades reported also.. guess we’ll find out who at some point…
Let's face it, the WFT extension was expected, and once Labour get into power things are likely to get worse for the industry.
I'm looking forward to an update from the company explaining their strategy, how they will respond to growing risks, outlooks for different scenarios, and why investors should stay invested. Hopefully this will include news of some overseas diversification.
06-Mar-24 16:35:14 172.00 801,283 Buy* 1m UT
With the latest rise in oil, this likely to be around 2. Nice to see gas also bouncing lately
Will be watching HBR with interest tomorrow
"With a divi so large and apparently managable whats not to like? As long as its not cut."
Say it quietly please
Apparently Norway O&G tax is higher than UK.
If so, they must be profitable enough to make it worth while.
Is the UK issue a lack of consistancy and a changing financial landscape?
At least the tax hasn't been increased in the budget, only extended for now, which could change.
And there was a comment about changing the tax as O&G prices 'normalise'.
If SQZ cost is $20 / boe they 'just' need to remain efficient and use other tax incentives wisely.
With other NS assets coming up for sale they could increase expand further.
With a divi so large and apparently managable whats not to like? As long as its not cut.
While not ideal Serica can comfortably manage the extended WF tax with production costs less than $20/boe, the price of oil building over recent weeks and set to move higher as commodities benefit from a weaker dollar in the second half of the year. Not to mention almost £300 million in liquid assets!
Pity he won’t go after the banks and other utilities when they publish their bumper profits!
It’s unfair that oil and gas shoulder the burden