Member Info for DennisThePennis

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.

Sorry, I missed this accompanying article…

https://www.telegraph.co.uk/news/2024/03/12/rishi-sunak-new-gas-power-stations-blackout-risk-net-zero/

Sunak's planning to build more unabated gas power stations.

Could be good news for gas producers if they can work out how to make a profit under Labour’s proposed tax regime (and if Labour don’t immediately cancel his plans).

Not sure if this is supposed to be a new policy announcement from Sunak…

https://www.telegraph.co.uk/politics/2024/03/12/rishi-sunak-energy-security-gas-net-zero-north-sea/

Very vague as usual.

If they don't invest overseas, I think the only reasonable course of action would be to return all cash to shareholders and wind up the company. If Rachel Reeves is the next chancellor and she goes ahead with her idiotic plan to implement a "proper windfall tax" to "raise £7 billion" (😂), E&P businesses won't be sustainable in the UK.

After the brief respite last week, it looks like normal service has resumed with the share price.

If this is still a healthy, profitable company, hopefully the BoD will be considering more juicy dividends to compensate shareholders for their substantial capital losses.

They're not actually losing money yet. Most O&G companies are still making some money (shock, horror!), at least until Labour get into government and introduce their profit confiscation scheme. At that point, I would expect all UKNS operators to down tools. I think it would be good to see how the country manages without domestic oil and gas production.

Let's face it, the WFT extension was expected, and once Labour get into power things are likely to get worse for the industry.

I'm looking forward to an update from the company explaining their strategy, how they will respond to growing risks, outlooks for different scenarios, and why investors should stay invested. Hopefully this will include news of some overseas diversification.

Quite a rapid decline I'd say.

The divi yield gets bigger by the day.

The smirky Hunt (sic.) isn't likely to do us any favours.

It beggars belief for a "conservative" government to consider another tax hike for oil and gas. Hunt can't raise income tax since voters won't like this so he's got to find money elsewhere to fund the Tories' high spending, low growth, big government project. It would be a short term political manoeuvre that would do enormous long term damage to the country.

As I see it, there are three scenarios for this share.

1. Labour get elected and follow through with their stated intentions on taxation. The share price will plummet along the SP of other UK oil and gas cos. UK North Sea decline will be rapid and it will be dead within 10 years.

2. Labour get elected and don't follow through with their stated intentions. The SP will rally and the NS will survive until 2050 to support the energy transition.

3. A decent overseas deal is announced reducing dependency on the UK. The SP will rally.

Until any of these eventualities comes to pass, the SP will continue to languish.

Https://www.malcysblog.com/2024/02/oil-price-dec-jog-serica-i3-molecular-energy-and-finally/

Jersey Oil & Gas has announced that, further to the press release issued on 23 November 2023, the Company has now completed its farm-out of a 30% interest in the Greater Buchan Area licences to Serica Energy (UK) Limited and received the associated milestone cash payment of $6.8 million.

...

For JOG this is another amazing milestone to have passed, apart from the legal certainty of closing, it puts JOG in a very strong financial position so that now they and their exceptional partners can take this project on to become one of the biggest, and low carbon developments in the UKCS.

For years I have been impressed by the way that JOG have moved forward and now that they have two high quality partners with Serica now formally on board (see comments below) they can kick on with certainty. My Price Target has been £10 per share for a long time now and at the current share price exhibits a material discount to the core NAV. JOG remains an outstanding investment in the sector.

...

Another great addition to the portfolio for Serica as completion of the farm-in to the GBA is announced. The GBA will define the future, low carbon and emission levers whilst being a big provider for the country, its oil workers and fiscal income.

I was on Twitter a couple of days ago despairing at some of the tweets posted by Labour affiliates boasting how they’re going to confiscate the ill-gotten gains of greedy oil companies like Shell, BP and Total.

The level of ignorance is staggering and I’m amazed the industry isn’t doing more to educate the general public. It’s no good posting statements on the OEUK website. They need to get on mainstream TV channels.

The fact that three directors have recently bought shares suggests that a transformational change isn't imminent otherwise they would be guilty of insider trading. I assume they're investing based on long term prospects. I don't see this personally but hopefully all will become clear when they release their next update.