Member Info for Banburyboy

General Levy - you are a decent poster but you are out on a limb here. Some excellent posts
- $20¡a barrel too much
- tax position unclear
- Merc clearly want control and they get it 25%
- payouts for Mitch and our senior management .
- NKTOB gave you an excellent and long list explaining why Merc and ordinary PIs won't be aligned.

Not sure why major shareholders would agree any of this . The fact they presumably have makes me feel there's nothing here for any of us small fry
Hanging on.in their for a bid as at £3.50 - £4.00 this represents a circa 2 year full payback to and bidder. Despite her comments Linda Cook must be looking at this and shaking her head. For three months net profit HBR would move to 30% UK gas all unhedged and significantly de risk there portfolio. Praying for a counter bid

General but for who them or residual shareholders. Would you agree from what's been posted this looks one sided. Had they approached us it would be goodbye ?

Thanks Stevo and I'm hesitant here but .. why would majors accept ? This is AIM but I thought at this level of cap we were above anything underhand ? Somethingsnot feeling right

Stevo agree completely.
I'm trying to see positive re tax losses and hedging but we come back to the same conclusion. Not a good deal.
Sorry if this is a naive question re recent posts but are the Board not reccomending this ? It's for SH to decide ?

Stevo - I think the nub of where we are is if the full $450m of future profits [ from tailwind losses] is tax deductible. $20 a barrel falls to $10 acquisition price
A reasonable supposition but detail is needed on portability of losses and if they can be utilised.

Consensus from us small guys is this is a oor deal and reject. I would much prefer a distribution / share buy back.
Surely larger holders must feel similer ? I can't believe the BoD would not sound them out.
New KoTB you are the expert on who owns SQZ now. Really helpful if you could post a refreshed holdings list. Sorry for being lazy in Thailand until Xmas eve (hence posting at Upomega times ) and Internet poor.

Regular posters will know I oftern ask why we don't hedge as much as can at current forward rates 300p a therm ?
Tailwind have limited gas but I think someone posted it was hedged at 240p a therm. Oil I think at $57.
From Harbours interims it indicates realised hedging losses are allowable against EPL provided they were realised post May 22.
This to me makes hedging really advantageous.
SQZ probably don't have the financial clout to hedge everything but Mecuria do and perhaps this is the benefit we are not seeing ?
So hedge at say $130 for gas $16 production cost. Taxable $114. Tax = $86 to SQZ $28.
$28 at 26k a day = $726k profit a day.
As I see it that's a guaranteed floor on profit whatever the prevailing price. If we lose out if prices are actually higher we get it back via the loss mechanism.
I may be barking up the wrong tree but Mecure could help with hedging

Hi all some great posts on here. Really informative
Visitors summery at 17.22 is excellent at face value SQZ are acquiring reserves at $18 a barrel when our market cap is $10 per barrel. Feels like we are overpaying and suffering dilution.
Stevo points out a contingent consideration of £54m on previous acquisitions. Which needs clarifying. If it picked up by SQZ the cost is more than $18 a barrel as its not in Visitors summation.

The unknown is the tax benefit. Issues are :
- what's the actual benefit of $2.5bn of losses? Feynod suggest £438m split evenly supplementary and main rate. That seems logical
- kris asks why is $757m only shown in accouts of Tailwind ?
- Rich thinks there is a 50% cap on losses use and restrictions on pre 2017.
- - Barry reckons they can only be used against Tailwind assets and HMRC will be all over it.
So a lot of questions on tax - maximum of £438m which would bring price down to reasonable - but likely to be lower and complicated to get full benefit.
Sorry if this is repeating but trying to capture salient points.

If I remember right most on here were hacked off as AA was using SQZs own cash as financing. We have all changed our tune :)
Seriously the key to this is the tax loses. The prevailing few is [1] they can't be used against EPL. [2] They can be used against SQZs production.
On there own these are worth about £850m. And would mean the combined group would probably only pay 35% EPL for at least 18 months.

Like others not sure what to make of this.
1 - The control element re 25% with Mecuria is worrying.
2. Info really sketchy on profitability plus production at Tailwind. RNS says they made $70m profit before tax in 2021 (sounds OK as oil prices low ) but nothing on cost of production on barrells of oil production.
3. Lots of talk of 15- 20k production in 2023 nothing on current actuals. What's the risk on ramp up ?
4. On face of it accumulted losses sound excellent $2.5bn in total but lack of detail on if / how they can be utilised.
Hard to believe main shareholders won't support thwy must have been consulted ? But some detail on tailwind would be helpfull.
I'm hopefull this will flush out a counter bid as at £3.50 counter offer you are paying £400m for 26k of producing assets. (After deducting cash) significantly less than we are paying for Tailwind with production seemingly half of our 26k. Hopefully Kistos after re-financing return

Thanks helpful but what do the locals do with the ore they pick up ? Further refine it to 4.5%. Transport it to somewhere that does ? The end to end economics from extraction to ultimate consumer I'm not clear on ?

This development certainly looks interesting.
Key for me is selling ore on a "pick up basis" .
I would love to know more around what happens next. What do buyers do with it. Do they make there money from extraction, further refining , transport to rail links and docks. What's the end to end model.
The locals will be very resourcefull and any model relying on the "little guys" sounds to me excellent.
The risks will be with Lithium stay at elevated rates and what level of price is needed to make this approach worthwhile ?
Movement over long term to higher grades should help mitigate this risk
Long term your timing here is exquisite.

Upomega the problem is Board silence. If they announced something IMO share price would rise.
I would prefer £500m returned by divis and share buy backs
As you say ongoing yield which would exceed 10% for a number of years from production to feild depletion.
I have NPV on current cash and six years of 26k production and 75% tax and 200p per therm at £1.5bn which is £6 a share.
I don't think we will have SP movement until the board announce a strategy

Zumore I had never thought the 20p and 50p RNS reference which is nonsensical would be linked to share consolidation but now you say its blindingly obvious. I wonder how much longer Bell can keep this up. Any small-time investor interest will be cut short by the many on here who would scare rampers away in short time. Looks like Bell has completely screwed his last set of high worth investors and Speculative Investor. Unless he's paid them off with secret Congo settlement ( sorry not you Spec you strike me as decent )? I know it's wrong to say that but seriously Bell's conduct is pretty rotten !!

Alnwick - thanks for the update.
Arguably you are conflicted what is great value to a customer is not allways great value to a shareholder !! You are both
I'm assuming and hoping your policy is fully underwritten ? For shareholders it's the introduction fee that matters any idea from the policy what that is in either absolute or percentage terms ? Obviously not having a policy in not conflicted so interested from a share holder perspective. Many thanks Banbury

Speculative investor I don't know what your average is but I'm guessing 0.7p plus ?
With the 640m share dilution announced yesterday ( agreed the $1.5m provides time) and the resultant dilution to potentially 0.2p on no news. You will need a four bagger to get your money back.
Only chance of that is a settlement of Congo in next six months. Personally I think Congo is dead and Bell is just not saying. He did similer with Greenland and if I recall a mysterious Cypriot lodgement.
I genuinely hope it goes well for you but recent developments and the dilution move this in the risk rather than reward direction.

Zumore missed that and it seems so
We raise up to $1.5m
550k at 0.7
1100k almost certainly at the floor of 0.2p.
That represents a max of 628m new shares at a weighted average of 0.24p assuming the floor price.
Hardly a premium to share price when looked at in its entirety but probably a 50% discount.
Not sure how long $1.5m will last but the company desperately needs Congo to happen to avoid the additional $1m being utilised at userous rates.

The game the reference to above and below 20p made me laugh.
The subscriber will be pushing the price as low as they can. Sweet point for subscriber is 0.161. If they can get it there. 8% discount drags it marginally below 0.15p rounded down to 0.1p. Feel sorry for holders and its not looking good.

Snoop I remain massively suspicious of the Board. But two reasons to be cheerful.
I can see no advantage in suppressing news and as others have said the CoS is 50% plus.
Those in the know participated in placing at 3.75p. IMO they would not do that blind.
I'm hopefull of getting 4p back but fearful of holding out for much more as Major shareholders have control and will act in their own interest.
But good luck here.

Hi Terry - the decisions are not always binary. So let's take what we know on WT as a given no floor here until 2028 and 75%. For me different decision s will reflect different circumstances.
1 - New investment the plus is the investment allowance the negative is tax. The overall impact on NPV of any descion in the UK is negative unless payback is extremely low. The only reason to invest is if we believe things will change. Most dont see change. Meanwhile NPV of investments abroad remain as is.
Existing fields - above production cost of $16 SQZ gets to keep 25%. So at $20 price 28k production 28 x 7 = $200k a week = $10.4m profit a year.
Ramp up to $60price that's $104m additional profit. The production decision is a no brainer but have we considered protecting ourselves by reducing production when prices are low ? [ in tandem with all North Sea] and supplementing this with affordable hedging.
None of this is ideal but as an industry and group we need to decide [1] our new investment response where I agree with the prevailing view avoid the UK and (2) the existing production response which not much is said about on this Board.
My initial thought was hedge the lot at 300p per therm but it was pointed out the really high levels of security that are needed to guarantee hedges. These will be lower now as price is higher but is ita good use of cash in hand to support a hedging strategy ? Should we borrow to support a hedging strategy.
For me there is a lot of subtely in the existing production strategy and played right it will demonstrate the real value here.
Bottom line is by hedging the lot at 300p or $174 a barrellwe mitigate the excess of WT and make circa $400m a year clear.