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Problem is that governments are not blogs at running firms! Just look at the state of he NHS
Thanks NewKOTB.
Lots of balls in the air, but I'm pleased that when it comes to my O&G investments that we are likely to be dealing with Truss & Kwarteng. Its just if they can hold firm and plan for the long term, no U-turns are essential if investment is to come to/stay in the UK. Good luck everyone, at least we will have a better idea of where we stand in a few weeks.
Sharechap,
To answer your question, "I'm just wondering what protection Serica shareholders have in such a circumstance when it comes to price..."
I would of said UK government would likely be subject to same competition and takeover rules that regulate current private takeovers and acquisitions. In other words offer a fair price, backed by our board that would be voted on by shareholders, I can not see any other way, otherwise, as suggested, 'a dangerous domino effect' would ensue that would kill-off NS for sure. Bit like Compulsory Purchase but requiring agreement of owners, ie us.
Strange how things could end-up going full circle, Thatcherism in reverse by the Conservatives too, who would have thought !
Of course, other option is for UK Gov to acquire a controlling interest, ie 50.01%. Not sure how that would work within normal market dynamics but i would guess, blow the SP skyward, initially, or how that would work on a operational / company WFT level.
I'm no expert in these matter, just my thoughts & all in my opinion & dyor
lol .... as if by magic, on BBC posted 13 minutes ago ....
"Nationalised energy should be an option, says Sturgeon..."
https://www.bbc.co.uk/news/uk-scotland-scotland-politics-62623751
Sharechap,
Agree, rule book out of the window when it comes to keep their jobs ....
If SQZ valued at ~£1.5bn (~550p/s) UK Gov would get its money back before end 2025 imo. SQZ currently provides ~5% of UK gas supplies, that could move closer to ~10% if NE really comes good. A move if they think NBP / energy costs will remain elevated for some time to come would be a good one, after all, otherwise every year until 'normal' ( whatever that is ) NBP pricing returns massive handouts will be demanded, billions upon billions spent, time and time again. Taxes upon taxes are not the way forward either, not for a solution to a crisis, what appears, as months goes by, will last for many years to come. Of course it would be done by UK Gov setting up some sort of Energy Security Wealth Fund with which to buy / hold / operate not just O&G's but other forms of energy providers / service companies too. It will not be spun as nationalisation but a pragmatic approach to solving issue at hand and stop Labour's band-wagoning, 'champions' of the British Public in their tracks. They would raise funds for Fund via bonds sold to the public / institutions paying an annual coupon. Could even float Fund as an option too .... I can see many ways forward, just the willingness to make it happen. Every nation across the globe will have been shaken, esp EU ones to make sure energy security becomes the major problem to be solved over foreseeable.
Lord knows ( although no guessing required ) what will happen if Labour get in Jan 2025 and energy crisis remains with no solution in place !
aimo & dyor
Yes it goes against 'Conservative' values and I would be personally opposed to anything like this. I just get a feeling that the stage is being set for Nationalising critical energy.
Moving the price cap to quarterly ensured that the problem would dominate the media almost every week. Anybody you speak to brings up the 'Energy Crisis'. Obviously there is a dangerous domino effect as you outline Norma, but introducing the WFT the way they did shows they are not afraid to throw the rule book out the window in an 'emergency'. The WFT has arguably done more damage than nationalising some North Sea assets could do. I'm just wondering what protection Serica shareholders have in such a circumstance when it comes to price, as it may not be likely, but it certainly is possible given the crazy world we live in?
…that would destroy capital formation in this country and a very dangerous path to follow. Gas might be crucial…but so too food, water, all transport, all communication forms etc. The list is endless. Taking private assets into public hands is fraught with difficulty in a free market economy.
It looks promising given Kwasi & Liz's opposition to the WFT. I suspect they are speaking the truth and want to eradicate it completely but doing so will give the media a field day and all those people that think a WFT only hurts Shell and BP and have never heard of SQZ or HBR etc will be livid. So it will need to come with significant incentives (handouts) to quell the masses, something which I don't think Liz will be keen to do. So what is the solution?
This may seem a bit left field, but with SQZ 'strongly' advising us to do nothing and the merger with Kistos falling away in a whimper, could there be a plan to bring Serica into public hands and use the company and maybe the North Sea assets of HBR as a vehicle to buy up more of the North Sea?
Something like - "We are scrapping the WFT because we are going to bring as much of the North Sea as possible back into the countries ownership. This will provide the country with energy security and we will set up a sovereign fund to invest profits into more acquisitions and 'green energy projects' for future generations". I can see that being sold to the people and if it is, what sort of price would Serica go for in circumstances like that, I have no idea?
Worth a quick read, the article by Kwasi is obviously dependent on Truss getting in, but reads positive to me NS wise if she does….
“We also need to maximise North Sea oil and gas production. Rather than slapping a punitive windfall tax, as Rishi Sunak has done, we need to incentivise investment in domestic oil and gas for our own energy security.
I appreciate windfall taxes are sometimes popular. But popularity won’t keep the lights on. We need to boost North Sea production, or we will end up importing more from abroad, exacerbating the problem even further.
Energy produced in Britain is by far the safest option, and that’s how Liz will deliver security, affordability and self-sufficiency for our country and our people.”
https://twitter.com/mos_politics/status/1561023524592132096?s=21&t=irOE-j82gM1gE61LKdI4KQ
That's factored in.
Let them.there is only so much they can tax .
The whole o and g industry will collapse if they are that thick. Which inmv they are not.
Worst cenario they back date. So what at these prices no big deal.
If prices collapse then just reduce production until there is an intelligent approach with this situation. I.e.tax google.amazon.facebook.ubor.and the rest of the lot. The list goes on and on.
Anyway upserica
“ So inmv the more cash Serica can build up the better. Then they can acquire asset's when the over inflated market adjusts inmv“
That’s if the UK government doesn’t steal the cash first
Libor is currently running close to four per cent for the year.
So inmv the more cash Serica can build up the better. Then they can acquire asset's when the over inflated market adjusts inmv
All O&G companies, especially the gas producers have got very lucky, obviously, this past year or so with prices so high; none of 'em saw this 'blessing' coming, though...
Clearly beneficial for all of them but for nobody else - sasa.
Just to add from Sassa,s post.
It may appear that the company has got lucky of late,but just like holders here decisions still need to be made at certain times. I would say on the whole they have been making the correct decisions.inmv
Soder, I have to say that your utter disdain for ACW / MF and especially the former's efforts, whether by luck or judgment, is quite extraordinary, given where Serica is today and it's buoyant sp. The success of an investment, or otherwise, is all that matters ultimately...
Can't imagine how you would react if you were sitting on a big loss! - sasa.
There making hey while the sun shines. Isn't a bad thing inmv. Also who do you think are directing operations.
Who was it that put the company in a position to take advantage of that gas price? That wasn’t your ‘mom’.
Of course the interims will be good. We sell gas. Gas price has gone through roof due to external factors that have absolutely nothing to do with management. I could have put my mom in charge of Serica in January and I would wager the performance would have been near identical as she would have done as mitch and the other boys. Ie nothing but count the cash as it rolls in from higher gas prices whilst doing sweet fa with it apart from taking huge salaries and share options.
Hi RELLIM - echo that...
Like you, I've been in the mkts for yonks (probably too long, some would say) but one thing I've learnt over time is that, provided the fundamentals remain sound / the potential is supervised by competent management, patience is all that's generally required over time...
Although the numerous facilities surrounding the investment game have radically changed since I was on the floor of the LSE in the 60's, those underlying requirements remain sound.
Many peeps know this anyway but find it difficult to exercise the required discipline beyond the short / medium term which, unfortunately, often leads to them missing out on a really significant outcome - sad but true - sasa.
Hi Sasa, like yourself, just trying to show some positivity. I have faith in the BoD and if I didn't then would not be invested here. I recall around ten years ago when SQZ withdrew from Indonesia there were similar mumblings and criticism. Likewise when in around 2015 when we took Erskine, many suddenly became oil experts. Whereas SQZ were in the process of consolidating a strong platform to move forward from.
It would be around that time that Mr & Mrs Hardy would be buying at around 4p per share. They too had faith and have been rewarded by a hundred bagger. I have been investing since the seventies and can count on one hand the number of ten baggers that I've had. It was the patience and faith that the Hardy's have had that has rewarded them well.
I believe that we just need that similar trust and patience in the BoD to not rush into anything silly but to tie up something that will again take us on the next step forward into an even stronger company. As NewKOTB has said, there could already be something close after we were "STRONGLY" advised not to take any action on the cheeky attempt by AA to buy us out with our own money. It would have been akin to the guy who buys you the next round in the pub with the money that he's just borrowed from you with no intention of paying you back.
Have a good weekend.
I
With respect Ralph, a share buy back scheme is the least productive way of beginning to utilise our huge cash pile and many on here have railed against it and rightly so, imv.
The BoD is only authorised to shrink the float by 10% anyway and our Y/E eps is set to balloon, regardless - sasa.
Hi RELLIM - Thanks - just trying to regain some balance here vis a vis the numerous frustrations focussing upon our excessive cash 'problem.'
It's a nice 'problem' to have, of course, especially now with no borrowings to service, either, as interest rates move higher and quite a few indebted firms will be looking upon our financial health with envy, I dare say, like AA, recently - we're obviously 'on the same page' here in that regard...
It does need to be gainfully employed at some point, though, as we all recognise and I hope our BoD has that very much in mind now, post Kistos, as the interims approach. We might just be in for a nice surprise or two, who knows? ATB - sasa.
Agree with upomega, not much value in buying assets at inflated prices. What would unlock the best shareholder value right now is a buyback programme.
Thank you AB, I did check out last years date, but just couldn't find any date published for 2022.
I guess patience is everything in O&G.
Thanks again
Johnny
Saw this posted on IOG board (Jigger_1) for what it's worth -
https://www.morningstar.com/news/dow-jones/202208186923/ftse-100-closes-thursday-up-amid-us-recovery
"Market Talk:
"UK Gas Producers Look Appealing as Gas Prices Inflate
"1403 GMT - U.K. gas producers look attractive as gas prices soar, Investec says. The U.K. gas price has surged to ten times the 10-year average following Russian moves to restrict gas flows to Europe, exacerbating an already tight European/U.K. gas market, the investment bank says. "To hedge against the likelihood of sustained high gas prices, we recommend investors get exposure to U.K. gas producers,"
"Investec analyst Nathan Piper says in a note. "We materially increase our U.K. gas price outlook and highlight three U.K. gas plays--Serica Energy, IOG and Harbour Energy. We anticipate that if Russia continues to restrict gas supplies, U.K. gas prices will remain elevated."(philip.waller@wsj.com)"
AB