Member Info for DennisThePennis

- 2022 revenue forecast decreased from UK£864.5m to UK£837.4m.

- EPS estimate also fell from UK£1.07 per share to UK£0.852 per share.

- Net income forecast to grow 56% next year vs 7.1% decline forecast for Oil and Gas industry in the United Kingdom.

- Consensus price target up from UK£3.76 to UK£4.08.

I'll gladly take £4.08!

Dana operate the Triton FPSO and they have been trying to sell their UK assets for a while.

dickupham:
"What has concerned me all along - and continues to do so - is the control that's been given to Mercuria and its founders. Shareholders are clearly at risk of M taking the enlarged SQZ private for a derisory price. For ACW and MF to have basically just said: "we trust these guys" is imv a dereliction of duty to shareholders at large that exposes them all to risk of significant loss."

Absolutely. In his next update, Mitch needs to spell out how extant shareholders are protected (if at all).

That looks pretty sloppy. I wonder what compensation can be claimed from the legal advisors and contract specialists who presumably have been paid handsomely to make sure the T&C's are watertight.

A good precis of the industry from TCW. Makes you appreciate the ineptitude of UK government.

Now the decision's made we'll probably see a bit of a sell-off by PIs then hopefully we'll see a recovery and positive growth. At least the uncertainty is lifted. Fingers crossed. GLA.

Building on my comment below, my main concern is Mercuria s (lack of) interest in looking after other shareholders.
In his next update, I hope Mitch will spell out how existing shareholders will be protected following this deal, bearing in mind Mercuria's controlling stake. Remember we're all part-owners in this business who have trusted the BoD and management team with our hard-earned money. I my case, it's money I've acquired over a 35-year career.

NewKOTB:
“Clearly more deals will follow this, how many, how fast and at what cost both in terms of deal metrics and additional debt, but as eggs are eggs ..... deals will follow, Mercuria are not here to sit out 18 months then take what scraps remain of SQZ.”

I agree. Beyond diversification in terms of oil/gas split, production hub de-risking and tax benefits, the main motivation for this deal is rapid accretive expansion using Mercurias’s deep pockets.

I note that a lot of Tailwind’s assets are former Shell assets, and of course Serica has a strong relationship with BP via ACW. Plus one of Mercuria’s new directors is an ex-BP M&A man.

Pure speculation on my part but I wonder if the enlarged SQZ will be a vehicle to mop up North Sea assets from Shell and BP.

Yes, it's very difficult to come to terms with this. Either the BoD has done a terrible deal or they've done a terrible job on communication. Let's hope it's the latter.

Market cap now £666 million. We must be getting close to cash in the bank. All those reserves and all that future revenue is worth almost nothing!

I’m with you Norma but I hope it’s less than 3 years.

I’ve stuck with Serica (and invested more) as the share price has dropped since I felt the business was hugely undervalued, especially with all the cash in the bank.

With this deal, I’m not so sure. I still think we’re overpaying, especially with the dilution, but I’m not exiting at this point and crystallising a loss which would be significant for me.

I believe Serica’s management and BoD have integrity and generally possess sound judgement, but I hope they haven’t grasped at this deal out of desperation. I hope Mercuria aren’t as evil as they’ve been painted here by some posters.

Rachel Reeves is another populist career politician, from a family of career politicians, who knows very little about how the real world works. The current crop of Tories are bad enough but gawd help us (and the country) if Starmer and Reeves end up in Downing Street. SQZ shareholdings will be the least of our worries.

In his video, Jeremy Raper made a convincing case to vote no. A bit more measured and less emotional than his letter.
Personally I don't feel management and the BoD would intentionally destroy shareholder value to feather their nests but I think the deal might have been rushed without sufficient due diligence, especially given the very uncertain and risky fiscal and business backdrop.
As has been observed by others, most board members don't have much skin in the game. If it doesn't work out for them, no great loss!

Maybe SQZ's strategy is to take over the UK North Sea and become last man standing.
With other operators like HBR threaten to divest and focus overseas due to the WFT, perhaps SQZ is planning to increase profits through volume rather than margin.

Indeed anyone who innovates, invests and works hard is being hammered by this government. Obviously it will all end in tears.
There's a good article on this by James Dyson in the Telegraph today.

Raper's response is very emotional, including claims which are not always substantiated, while Stahel focuses on the facts and figures, showing his workings. I know which one gives me more confidence.

Upomega, as far as I know, no answer has been provided. Originally they said something about historic norms (without defining what this means) but with the V2 of the WFT it became even less clear. I know the industry has been asking about this but I don't think HMG has provided any clarity. I find it staggering that they can change tax rules on the fly, introducing a temporary "windfall" tax, without defining any parameters about how/when it will be applied.

A windfall tax without a floor or any definition of 'windfall' is an absolute joke. It's the sort of tax a banana republic would implement, not an advanced economy.
As oil and gas prices drop, the only way for UK producers to stay in business, let alone grow, is to avoid the tax. I assume that's the thinking of the Serica BoD with this Tailwind deal.

Infor, I'm wet behind the ears and don't know how this would work but I think you're absolutely right that the share price has been manipulated down to its current level.

Norma, 'more colour'... a dead giveaway that you work in the investments sector.