focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Think I may have Harira for starters, Mechoui for main accompanied by spiced chicken Tagine followed by Baghrir with plenty of sweet, sweet honey to celebrate, washed down with a bottle of Thalvin.
The below two graphs are interesting as inmv it clearly shows that we are now following the crude price.
https://www.lse.co.uk/ShareChart.html?sharechart=SQZ&share=Serica
https://www.marketwatch.com/investing/future/brn00?countrycode=uk
We could also be in for another good day tomorrow with brent currently up.
"Serica Energy said its pro-forma Proved plus Probable (2P) reserves increased to 130.4 mmboe as at 31 December 2022 compared to 104.0 mmboe as at 31 December 2021, following the acquisition of Tailwind. After the purchase, Serica is now a top 10 producer in the UKCS and a significant contributor to the UK’s energy security, the company said.
In a separate announcement a few days later, Serica said the acquisition had also added considerably to the organic investment opportunities in Serica’s portfolio. Rig slots have been reserved in order to drill infill wells on the Bittern, Gannet E, Guillemot North West and Evelyn fields in 2024, all of which are existing tiebacks to the Triton FPSO. The potential developments of the Belinda field as a tie-back to the Triton FPSO and the Mansell field, situated in the UK Northern North Sea, are being evaluated..."
A good report published by OGV Energy which Westminster politicians could benefit from reading.
https://www.ogv.energy/news-item/uk-north-sea-energy-review
Link still works if copied and pasted
intresting reading
Serica Energy: EV $566m; 120m 2P; 45-50kbpd
Noreco (Bluenord): EV $1,700m; 200m 2P; 50kbpd later in 2023
https://twitter.com/BurggrabenH/status/1653799645984743424
Not sure if link will be active as it appears after yesterday's LSE 'update' links, no longer link !!
For Shell, BP etc although the WFT is overall is bad news it does have its upside as they are only about 5% in the UK and reducing. Every time they post large profits (even if generated from commodities trading) there are calls for the WFT tax to be tightened, more O&G companies reduce UK holdings, more has to be imported and Shell, BP etc supply this paying taxes at a reduce rate elsewhere.
As for Labour and proper WFT, just pure politics with no regard for how much harm it does to the UK. As I said before 75% tax on profits now or reinvest the profits then 75% tax on profits latter, either way HMRC get the money.
It is a clear the UK is un-investable especially in O&G with crazy anti business policies from both main parties.
From another board
Merger, story of pig and chicken, one day chicken says to pig let's merge breakfasts are booming, we will make a fortune, I lay the eggs you supply the bacon. Great said the pig, then he thought, hang on Mr Chicken you lay eggs everyday, I get carved up. That's why I called it a merger, not a takeover said Mr chicken
Looks like a what is happening/going to happen here. Hope not.
For Shell to sell Cambo, someone has to buy it. I think that would be a brave/stupid company in the current climate. UK O&G companies are going to get ransacked by HMRC for the next few years until the industry disappears or the government comes to its senses. I’d bet on the former. SQZ needs to start shifting overseas.
More reassuring today in that we have firmed up with the oil price. It adds some comfort that should oil rally we will also rally on the back of it.
From Telegraph:
"Shell is looking to sell its stake in a controversial North Sea oil field after Labour accused the Conservatives of failing to bring in a "proper windfall taxes" on energy giants.
The oil company is looking for a buyer for its 30pc holding in the Cambo oil project, its partner Ithaca Energy has said.
Cambo, which is the second-largest undeveloped oil and gas discovery in the North Sea, has been the focal point of many protests.
Shell has been rumoured for months to be looking for someone to take over its part. The remaining 70pc of the oil field is owned by Ithaca Energy.
In 2021 Shell scrapped its development plans for the project, putting its future into doubt.
Today’s announcement comes after the company made nearly $1.7bn (£1.4bn) more in profit than experts had predicted in the first three months of the year, with adjusted earnings rising 5.7pc to $9.6bn (£7.6bn).
Shadow chancellor Rachel Reeves said: "Shell reports £7.6bn profits for its first quarter yet the Tories refuse to bring in a proper windfall tax on oil and gas giants to freeze council tax this year, as Labour would.
"We'll tackle the cost-of-living crisis, and put working people first.""
I posted numerous times on here and advfn saying that had they all stuck together in the beginning we would not be in this mess. The idiots that went for the last North sea licences didnt help matters. Im sure it would have had an effect had they put up a united stance at that time. This tax is here to stay now at the very least. Let alone what could be added to it in the future.We might get lucky if oil prices completly collapse, but that would completly wipe out any profits anyway.
Just been watching Sky News and interviewer asking a labour Mayor what is Labour’s best Policy - answer is to impose the WFT. That just tells you all you need to know about ignorant politicians.
Meanwhile, even Shell boss now calling WFT unfair. Let’s get all the oilers and reduce production now and Keir will have to raid somewhere else.
We are scre...wd If the local elections are anything to go by. Serica really do need to do something quick and diversify overseas. Otherwise we will soon be un investible. For me i am seriously considering moving on if the shares can rebound a little . A nice spike in oil prices would help now.
https://twitter.com/BloombergNRG/status/1654301086784561152
Crude markets have suffered a disastrous few weeks, dragged down by alarm over the wider economy. But real oil demand still looks strong enough to foster a rebound in prices
Price Collapse Is Excessive and Physical market is ‘pretty tight,’ Shell CEO Wael Sawan says
Shell, BP and Total trading and shipping arm's out-traded Vitol, Trafigura, Mercuria and Gunvor !
All profits from such operations are no doubt are out of reach of UK's 'windfall' tax jurisdiction.
aimo & dyor
Trust the Italians. Get the feeling they are 12 months to late:-) Either that or they have not looked at prices recently
Italy is now calling for a windfall tax on banks. I wonder how long it will take before Starmer calls for the same. So if the unofficial pm calls for it you can guarantee it will happen. So hopefully that will then take the heat off North Sea o&g producer's. . That's if there is an industry left by then.
We can't even follow the oil price now. Come on someone bid for us. Three pounds plus the dividend sound's good to me. The question now is what does the market value this at now. Absolute crap inmv. I hope the bod are following this and try to come up with something. Maybe offer an enhanced dividend
Good post dickupham,
I prefer the Norwegian tax system to ours at present, It seems more efficient, particularly in refunding losses.
As I understand it the Norwegian tax on upstream businesses is 78% (22% corporate rate and 56% special tax)
There are allowances that can reduce the 'real' tax rate and a refund system for losses
Costs for the maintenance of operating assets used in the upstream business are deductible against 78% tax, regardless of whether the assets are located on the continental shelf (offshore) or onshore and the refund system means that, in practice, a company will always have 71.8% of its losses covered.
This blog explains it in terms that an idiot like me could grasp.
https://blogg.pwc.no/skattebloggen-en/the-norwegian-petroleum-tax-system
Mitch promised the TW deal was accretive so hopefully there's a plan. A 10% divi isn't much comfort when you're losing 50% of your capital.
Serica goes XD on the 29th June and pays on the 27th July.
It's now an income stock (yielding a solid 10%) with some price recovery from here to be seen soon, one hopes - not that we ever invested here on that basis, of course! - sasa.
Below is an extract from LBE's RNS issued on Tuesday relating to inward investment by a sizable Japanese O&G player :
"Norway continues to offer an attractive regulatory framework including a recent change in the Petroleum Tax System, which has resulted in significantly improved economics of new development projects. The main elements of the new system are the introduction of immediate expensing of investments, 71.8% repayment of all losses in the following year (compared to previously 72% of exploration losses only) and a corporate tax at 6.2% carried forward against future profits. The marginal tax rate remains unchanged at 78% but return on investments in development projects is significantly improved and the total capital requirements substantially reduced".
Kier Starmer is promising UKCS E&P companies 78% tax on their total profits AND the withdrawal of enhanced (perhaps all?) investment relief when Labour gets in next year. He claims this is feasible and acceptable because "that's the rate charged in Norway" (quite what Norway has to do with anything the UK decides to do is beyond me - maybe I'm just slow?). As can be seen from the above (and numerous internet sites providing information about Norwegian O&G taxes) there is a vast difference between what Starmer (or Stoma, as I call him because what comes out of them is much the same) and the truth. All Labour politicians are peddling the same lies about "a proper windfall tax". God knows how many times I've screamed at the television as the same myths are trotted out by the politicians. And it is NEVER rigorously challenged by the dim-witted news presenters, journalists and whoever else Labour is promising that "a proper windfall tax" will pay for everything in their marxist manifesto - you know how it goes. Money promised to the voters about £100bn - actual take (and a rapidly declining one as oilcos quit the NS in droves) about £10bn if conditions remain stable - they won't for long in the UK if Stoma and the proven t.wat Milliband get their way.
"The OBR currently forecast tax receipts over the six-year period 2022/23 to 2027/28 will average £8.6 billion, up from an average of £0.8 billion over the six years to 2021/22.": https://commonslibrary.parliament.uk/research-briefings/sn00341/
The reasons for the low take in the 6 years to 2021/22 include COVID and Brent Crude falling off a cliff in 2016. Tax receipts felll to £0 in 2 successive years in the mid-part of the decade and practically £0 in the year after. This was more than just partly as a result of the O&G industry's reaction to Gordon Brown steadily increasing the supplementary charge so that tax paid by O&G cos increased to 60%. Self-defeating. The clown Osborne then increased it to 62% when Brown was kicked out in 2010. Eventually it was put back to 40% in about 2015. Investment then slowly began to recover......... now they're at it again.
What was it Einstein said about insanity?
all jmo
dyor
When does serica next go Ex div?
Good point RonnieH.
Some hmg and hmg in waiting has a lot to answer for inmho. Could the oik or the lap dog of in the of the con party conspired together???
My guess is that they have.