focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Mommur, I hope you're right that a deal is imminent, but I'm not confident based on track record. For years we heard noises about another acquisition, culminating in the pedestrian Tailwind deal. Let's hope the new crew have more ambition and a greater sense of urgency.
Reasons for weakening SP...
1. Weakening oil and gas prices.
2. Imminent Labour government promising to ramp up "windfall" tax and reduce investment allowances.
3. Imminent Labour government promising to create GB Energy (whatever that means).
4. Lack of confidence that this company is serious about overseas expansion. Time will tell (but hopefully not too much time).
Perversely, we might make more money if O&G prices plummet. Once they get below a certain threshold for a sustained period (can't recall specifics), the "windfall" tax ceases to apply. Utterly absurd.
Sadly the share buyback doesn't appear too be working. Too small.
Dread to think what's going to happen to the SP once the buyback ends and the divi is paid.
Need to get our skates on with that Norway deal.
The market has done phenomenally well today. All my holdings are up with the exception of SQZ (once again) which frustratingly is my biggest single holding.
It seems management needs to work harder to convince the market that SQZ is a sound investment.
I think this company needs the get its strategy sorted out and stop hypothesising.
WTF is happening with the share price again today?
IMV, the buyback was too small and won't move the needle. Better to return cash to SHs as dividends and avoid any further UK investments which don't payback within 2-3 years.
With such punitive and uncertain fiscal conditions, it's no surprise that there's a lack of interest in drilling licences. Hopefully the NSTA will communicate what this means to the thicko government, whoever is in power at the end of this year. No drilling, no development, and far earlier cessation of production for most fields. The tax revenue will stop, tens of thousands of jobs will be lost, and we'll need to import all our hydrocarbons at considerably higher environmental impact.
I'd be amazed if this is true. Sounds a bit too adventurous for Serica. Easier to stay in the comfort zone and keep paying windfall tax.
Looks like Petrofac is in serious trouble. Shares suspended today.
Petrofac is an O&G engineering company with a lot of business in the North Sea. Not sure about their criticality in Serica's supply chain but if they're heavily involved in engineering or operations, this might explain the SP drop.
I would hope Serica wouldn't be too dependent on just one company.
SQZ needs to get out of the UK. Politicians of all parties are intent on confiscating O&G profits since they think it's easy money and most voters don't care. Sensible voters realise it's a slippery slope which could lead to some serious, life-changing injuries.
A reasonable update but a disappointing market response. Glad that the dividend has been maintained but I guess the SP isn't going to shift much without a step change in UK taxation or overseas diversification (which should now be the priority).
Rather than speculating blindly, I suggest we wait for the update in a few days.
Sharehunter2, from what I remember, 50% of Rhum is owned by the Iranian Oil Company but they're not involved operationally and proceeds from gas sales are placed into an escrow account to comply with US/EU sanctions.
Personally, I didn't think the situation in the middle east will have any impact on Serica (apart from driving up oil price) but I'm not an expert.
AIMO.
Unitman, fundamentals for Serica have been very strong for a long time but two factors have impacted our share price.
Like other oilers, continually changing taxation has impacted our profit, caused a lot of uncertainty and damaged confidence. This is not yet resolved since Labour are promising to make taxation even more punitive if they win the GE.
Secondly, the Tailwind acquisition made a lot of sense in terms of growing production, giving us a better balance of gas and oil, and giving us greater operational resilience, but we paid a very high price.
A management update is due very soon when I hope we will hear more about company strategy, specifically how the company will continue growing (through overseas acquisitions I hope), how the tax losses will be used to boost the balance sheet and maintain/increase dividends, and how we will respond to a Labour government and the additional tax burden that is bound to be imposed.
I hope our SP has bottomed out but I've said that a few times.
It was assumed by many that the tax losses justified the extraordinarily high price paid for Tailwind. However, 1 year later it is not clear if/how they can be used to benefit the enlarged company, and we are still waiting for a proper explanation. The share price has dropped 30% since the deal.
In other news...
"The feedback I get from shareholders and from banks is: 'What are you doing in the UK? We want you to invest in other parts of the world'," Flegg told attendees at a meeting of industry group Offshore Energies UK (OEUK) today. "That's the elephant in the room. We can't ignore that."
Yes indeed!!! Hoping that the next government might not do what they say they'll do isn't a great strategy. This investor would like to know what Plan B looks like.
https://www.argusmedia.com/en/news-and-insights/latest-market-news/2552085-serica-ceo-warns-on-uk-offshore-investment
Some really healthy gains across my whole portfolio in the past couple of days. Except for SQZ as usual.
At the AGM, I'd like to hear what the BoD is doing to address this. Do they have a strategy? How will they respond to Rachel Reeves and her proper windfall tax?
Thank heavens for BAE and RR. Not compensating for my SQZ loss but making it slightly less painful.
I think they're rushing to get as much done as possible before a Labour government. Then all North Sea investments will stop until Labour see the error of their ways and concede a u-turn. Just my theory.