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to work through by the looks of things, SP seems to be going the wrong way again
All that renewables kit needs a shed load of petrochemical product…it’s a very lengthy transition.
RNS:
London, 30 January 2023 - Serica Energy plc (AIM: SQZ), confirms that David Latin, non-executive director, purchased 15,500 ordinary shares in the Company at an average purchase price of 247.177p per share.
I wonder if it was a requirement in David's contract! Mitch has to announce the share buyback and generous dividend to maybe get a 5% movement.
15k, major vote of confidence...lol
Well that’s nearly £80k he’s put in last 3 weeks
Where are the other pair buying who forced this deal through? On the beach is my guess
Huge support, no movement - strange
Huge support........hmm feels like huge background seller, selling into any strength, such as it is
48 million shares held voted against the deal. Even if only 10% of those decide to throw in the towel now, it will keep the share price depressed for quite a while. I would envisage the number would be higher than 10%. Either way, by the time the selling has concluded, I would hope we have stopped arguing about lock boxes and can see what the future outlook is going to be and that the share price can re-rate a bit.
Re rate will be interesting and from what level will we re rate ....any ideas
Zebo two considerations for me
- the surge in Tailwind production continues
- the locked box has Tailwind cash generated from 1st Jan 2021 In it. £150m would seem reasonable.
If both happen £3.50 possible but no guarantees
*1st January 2022
Banbury - cash generated since 1st Jan 2022 is not the important metric, as we already know net debt was £277m in Nov 2022. The only metric that changes any valuation of this acquisition is "leakage".
We already know a huge dividend of $95m was paid on 12 Jan 2022 straight after the lockbox date. Based on very limited knowledge of "leakage" in the circular (in legal terms, we are provided no real definition of leakage), most investors would assume this $95m would class as a "leakage" and will be paid back by Mercuria to Serica. Unless the SPA has a far more detailed definition of "leakage" with caveats and carve-outs? It seems bizarre that a leakage that happened over a year ago and known, is not taken account in the final agreement in Jan 2023. For example, why is SQZ paying TAIL £61m (£57m + interest), when there is already a known leakage of $95m as far back as 12 Jan 2022, a year before the final agreement is drawn up.
The other question is has there been any other leakages from Jan - Nov 2022 impacting TAIL's Net Debt metric of £277m? All other metrics are known so does not matter if there is any leakage post Nov 2022, as we have £277m Net Debt baseline to work with and TAIL's production numbers and cost per boe thereafter.
Visitor - good post. I have completely overlooked the point that the reference date for the debt was Nov 22 and as you say that should reflect cash generated in the previous 11 months.
The fact that the lock part starts from an earlier reference point than the agreed net debt is somewhat bizarre.
The dividend paid out in 2022 was in relation to the Tailwind 2021 year so is probably out of scope.
Logically you would expect closing debt to have fallen materially from Jan 22 to the Nov agreed figure to reflect 11 month cash generation.
But who knows with this deal .
Banburyboy - after receiving clarification, my initial suspicion regarding carve-outs and caveats from "leakages" and your post that TAIL 2021 div paid on 12 Jan 2022 is probably out of scope is indeed correct. So the whole lockbox date and leakages can broadly be disregarded, wont change the valuation and calcs we've all done here, why we came to our individuals decisions etc.