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It’s the EPL and Labour that are killing this Company and others
With gas prices there lowest since 2021 before the Ukraine debacle and prices set to fall, the winter has been mild and gas stocks throughout Europe are at there highest for this time of year, oil prices are hardly breaking all time highs so is the wft due for renewal or challenged as it only supposed to be for gains which are deemed extraordinary to normal market conditions.
IC also has a page write up on Sqz and has it as a buy, which is better than hold or sell, perhaps the worm is turning.
Seems were in the same boat chinch,but I'm still holding a few awaiting some kind of bounce. Having said that it could once again be a interesting buy ,but alas not at this level inmv, dyor
Well that’s it - sold my last tranche this morning having bought in at 14p. This is going nowhere as epl and the acquisition of Mercuria have had a devastating impact on the Company. MF has feathered his nest and really should have taken this company forward but decided not to do so. The div might also be under threat,
It’s been a blast over the years with lots of informative posts from various people for which I’m grateful.
I wish everyone all the best for the future.
Skerryvore: The UK North Sea ‘well to watch’ this year
https://www.energyvoice.com/oilandgas/north-sea/exploration-production/548401/skerryvore-the-uk-north-sea-well-to-watch-this-year/?utm_content=176885462&utm_medium=social&utm_source=twitter&hss_channel=tw-1379070162
Preferably from Hull uni and not the rest.
Come Serica you can rise today can't ya. After all it's poets day
What industry does hmg and the new hmg actually support. If so how long will they actually show kind of support to anything that they are pontificating at pressent.
I Personally i am not from a oil and oil gas backround and not that well eduquated , but can clearly see that we should be supporting such industries as this during the transpition stage, So what the \h..l is going on here... Maybe some eduv=cated person can answer this one, ???
Surprised
I hope it is due for a rebound. For me then that will allow me to offload further. Fwiw i am not blaming the bod in so much as hmg . As i believe events have over taken their most recent decisions. As we all know any planing a business objective needs to plan ahead, but alas we we are now dealing with matters beyond anyones control. So maybe Serica should just try to preserve as much cash/oil field reserves as possible and not develop anything and possibly start to unofficlly mothball production. Easily done by saying things such as health and safety and some bit falling off a rig . inmv onmho
The problem now is not so much to do with not diversifying overseas , but with HMG and all the other political parties. Oil and gas in this country now has no political allie. So where do we go from here.
Some of you may have recalled that i have mentioned on numerous occasions that they should have all stuck together and not bid for any licenses let alone develop excisting ones. As i have posted before they are speading up their own demise by not being united.
As the saying goes United we stand divided we fall.
Last one leaving turn of the lights. Just hope that Serica is not that one that does that.
Https://twitter.com/surprised_trade/status/1760730520952967248
Idea of the week from Investors Chronicle - Serica could be due a rebound, metrics look so attractive-Peel Hunt says'' it is important to state that we believe the business remains in a very strong financial position and is funded for all planned work programmes and shareholder distributions."
https://www.investorschronicle.co.uk/ideas/2024/02/22/this-north-sea-energy-company-is-making-waves/
Part of today's feature ..
This North Sea energy company is making waves
Investors should take note of this mid-cap's profitable growth strategy
.....Serica’s relatively low enterprise value (EV)/Ebitda ratio is driven by its high cash profits and small pile of debt. Ebitdax (‘x’ being exploration costs) for 2023 is forecast at £401mn. This is a sizeable drop from 2022 due to lower oil and gas prices, but still represents a cash profit margin of 63 per cent. Broker Stifel thinks this margin will climb to 70 per cent in the current year, implying Ebitdax of £612mn. .........
Peel Hunt analysts Werner Riding and Matthew Cooper remain bullish, however. “Despite lowering our numbers, it is important to state that we believe the business remains in a very strong financial position and is funded for all planned work programmes and shareholder distributions."
...........
The Tailwind deal was covered with shares – 100mn new shares, to be precise, taking the count to around 380mn – and £58.7mn of cash, drawn from a sizeable cash pile. The deal increased Serica's production from an average of 26,000 boepd to a forecast 40,000-45,000 for 2023. The thinking behind the deal was the same as that behind the BKR acquisition: add mature production.
The broad idea is that mature fields that aren’t large-scale enough for the majors to take an interest in or to hold onto for the long term will still have reserves large enough to provide positive cash flow for at least a few years. ......
.....Much of the appeal of Serica lies in its low operating costs, although these have climbed a third from $16 (£12.70) per boe in 2022 to around $20 per boe now, according to Peel Hunt forecasts. They are expected to stay around that level in the medium term, however, and margins are already ahead of peers'. Gross profit per barrel (or netback) is around $40/boe for 2023, which Stifel forecasts will rise to $49/boe this year.
.......Chris Wheaton, an analyst at Stifel, sees net cash rising from £81.4mn at the end of 2023 to £449mn two years later. This is more of a rebound than a turnaround, given the use of £58.7mn in the Tailwind buyout and a cash outflow in the second half of last year (as per Wheaton’s forecast). But it does leave management with some firepower, even alongside its work to get more barrels out of existing wells. ..........The oil and gas industry has enjoyed a resurgence in government support in recent years, after a long period of investors pulling away. Clearly North Sea players have not had all their wishes granted – the windfall tax still being in place is the key example of this – but forecasts around oil and gas use have been revised as global trade flows have changed. ...........Serica's short- and medium-term prospects are good, and at this yield and valuation we would buy.
Such punitive taxation only applies to companies responsible for providing 75% of the UK's energy. They're not as important as banks who are still allowed to make a profit.
Are they also promoting that banks be subject to WFT too ? Have you seen some banks profits the last few days ?
Our time will come, hopefully with as new CEO imminently. Unless Mr Flegg was "pushed" I would have thought sourcing had been happening off the record for a while, with likely candidate(s) hosted. The right person will certainly lift our sp.
Looking at Kistos purchase, £25m has led to a 23% uplift to the sp as I write. Mayhaps a hostile bid for Longboat Energy would challenge their management and entice disillusioned major shareholders to accept after 5 years of underachievement. That would give us Norway and Malaysia diversification - little morsel rather than a bid for Kistos and a new excellent CEO from them!! Who knows, but I am in Surprised's camp - the cup is half full and just needs a couple of lumps of sugar!!!
See even the Lib Dem’s are now promoting taxing O&G for a proper ‘windfall tax’ in their party political broadcast today too !!!
I hope you're right but I fear our dumb politicians will continue to favour populism over what's best for the country. It seems they will happily destroy the industry and sacrifice tens of thousands of jobs (if not hundreds of thousands) to show a few dumb voters that they're being tough on greedy, polluting oil companies and leading the green transition to save the world. The UK O&G industry will go the same way as mining and manufacturing, and we'll be importing our dirty hydrocarbons from overseas.
But as I say, I hope you're right, and I sincerely hope the SQZ BoD has some tricks up its sleeve.
100% agree, no right minded person will run a business if there is no profit. The EPL has hit all NS operations and all political parties have demonstrated they have no understanding of business, we all agree on that...The posts below detailed the reasons why SQZ holders held and now it is for SQZ to make the moves that circumvent the EPL and put shareholders, investors and the business on track to greater profits , dividends, growth etc, all the aspects everyone was invested for....the business has the facilities/cash/assests etc to make the right moves, it now requires the BOD to move the business onto a new footing (like HBR) and hopefully a new CEO will lead SQZ from this lull.
Oil and gas are going to be around longer than many imagine and oil shortages are forecast within the next 6 months on almost all analysts projections and with the cost of wind farms deterring even the largest operators gas will be back in play as the economics are likely to outweigh any political views or return on investment as the 'green' iideology hits reality.
Surprised, who would borrow to invest when they can't make a profit? It looks like total tax take is going to increase to 78% while investment allowance will reduce from 92% to 48%. Apologies if I've got those numbers slightly wrong, but it's almost immaterial. Servicing debt and making a profit will be impossible.
With respect DTP, it's the reasons many folk, probably including yourself, hold part or all of a holding in SQZ, the details relate to past and present operations, including the new US $525 million 6-year Borrowing Facility, a very recent event.
Surprised, that's all in the past.
Things have changed.
Gas price has plummeted yet the "windfall" tax remains and will be increased by Labour while tax allowances will be reduced.
There will be no incentive for operators to invest or even continue operating in the UK.
Really hoping Serica announces something more positive soon (like a decent overseas acquisition or a mega special dividend before it winds up the company).
January 2024 -- rns - New US$525 million 6-year Borrowing Facility
"I am very pleased to announce the signing of a new RBL facility which substantially enhances Serica's financial firepower. This has been achieved in a challenging market for upstream financing. The standing of the international banks in the lending syndicate reflects the quality of Serica's asset portfolio, strong balance sheet and ambitions for further growth. The new facility, combined with our existing attributes, means that Serica can approach acquisition and investment opportunities from a position of considerable strength."
--------------------------------
That completes some of the reasons many have held their SQZ investment in part or whole....rightly or wrongly, time will tell.
In December (10 weeks ago) -rns
'' I am also pleased to report successful well campaigns on the Bruce and Guillemot fields during 2023. These are further proof of the benefits to be had from low cost, short cycle investments in our existing asset portfolio. The full impact on production of the well work carried out this year is expected to be felt in 2024.....a third campaign in 2024, which will target wells on both the Bruce and Keith fields. ..start of a four well drilling campaign in the Triton area, with the first well on the Bittern field scheduled to begin middle of the first quarter. 2024 is anticipated to be a very busy and impactful year of investments in Serica'
The integration of the Serica and Tailwind organisations and processes has been progressed since the completion of the Tailwind acquisition in March 2023. Steve Edwards, Dave Freeman and Tom Ujejski will be ending their roles with Serica by the end of March 2024. ''
In September -rns -
'The completion of the Tailwind acquisition in March represented a step change in the scale and diversity of Serica, achieving a longstanding strategic goal. We have stated consistently our intention to continue investing in the enlarged portfolio, to add to it in a disciplined fashion if the right opportunities arise and to make further cash returns to shareholders. ...
Profitability maintained with higher sales volumes largely offsetting lower gas prices.
Highly cash generative portfolio of assets
.Average realised gas price of 96 pence per therm and realised average oil price of US$64 per barrel
Work on multiple Bruce and Keith wells being undertaken during remainder of 2023 and in 2024 to boost production performance.''
In addition in May the '' Long Term Incentive Plan Awards
The award has been made to members of the Group's executive team and senior management, based on absolute share price performance over a three-year period and specific performance targets related to carbon emissions from operations over the same period. For the awards to vest in full, the highest average share price must be at least equal to 500p''
Very few if anyone sold out of SQZ as on April 13th 2023 results were announced by Mitch Flegg -
''... another year of outstanding progress for Serica. There was strong growth in production volumes, a significant upgrade to reserves and increased profitability at all levels.
Serica's two-pronged strategy is to invest in our high-quality portfolio of UK North Sea assets to unlock value and prolong their life whilst continuing to target future acquisition opportunities.
We have now completed the acquisition of Tailwind which has boosted production and reserves and provides a number of short-cycle growth opportunities for the Company.
I'm delighted that we can recommend an increased final dividend of 14p per share. The continued strength of the Company underpins the intention to maintain or increase the dividend in future years."
Profits increased at all levels with a 93% increase in operating profit and a 124% increase in profit after tax, boosted by the end of BKR net cash flow sharing, increased production volumes and higher commodity prices.
Serica 2P reserves increased to 74.9 million boe effective 1 January 2023 (1 January 2022: 62.2 million boe) with Group 2022 production replaced more than two-fold.
Final 2022 dividend of 14p per share recommended, bringing 2022 full year total to 22p per share
Completion of the acquisition of Tailwind puts the Company in a strong position to maintain and grow its dividend.
......................................................................................................................................
The above is taken from last years results RNS a lot of reasons no one sold out.