Member Info for flexmw

Apparently the view of Stifel on the deal, I don’t know the poster, perhaps hence the FT …

https://twitter.com/blakefox7/status/1605550009855909889?s=46&t=ZJEqzlBUz6T6VK-pbpMs6w

Quite a bit of interest this afternoon on day ahead prices for electricity for tomorrow, hitting new highs as demand has soared with the current weather situation, must be a follow through on NBP seeing as it’s been providing a consistent 55-60% of supply..

National Grid :
https://grid.iamkate.com/

Javier Blass’s take :
https://twitter.com/javierblas/status/1601900043375616002?s=46&t=Z2ZNtm1jNoFOmjvnYkauRA

Alex Burgrabben’s view:
https://twitter.com/burggrabenh/status/1601970246373490692?s=46&t=Z2ZNtm1jNoFOmjvnYkauRA

BB

To add, the £300m was in relation to the gas price peaking much higher but still a consideration…. thanks

BB

If all production was hedged at 300p per therm as you’ve suggested a couple of times, how much money would need to be placed against those hedges, if over £300m was lodged earlier on in the year on around 20% of production?

Hi Sasa,

I think you’re probably right on this regards dividends etc noting this sentence from the recent update:

Margin call requirements on these hedges had stood at over £300 million earlier in the year but have now reduced to significantly below £100 million.

With money held on account for margin calls being one of the largest factors holding Serica back on considering Special Dividends/buy backs etc from the recent Investor Meet presentation with MF….

Cheers Shakey!

Hi Newkotb

Do you have a link for the Marex site for NBP day ahead prices? the page I was using has ceased to work…. thanks in advance!

I saw this over on advfn, it’s a copy & paste job & no idea who 1budgsy is or actually is, but worth a read if his knowledge is correct….

1bugsy: Disclaimer....I sold out of SQZ due to the UK political risk of a moronic parliament, to invest in USA gas companies.

I spent 25 years designing oil and gas wells and working as a senior offshore drilling supervisor so I have some knowledge of this process.

This Sqz news is not that bad. If they hit oil sands then they know the main fault was a “sealing fault” trapping the oil on this side. This is VERY positive result,

All it means is the well location is off and they will re evaluate the slope of the geology bedding and see which way the beds are dipping.

A side track would be directed to the thicker sand. They must be fairly confident the sweet spot is close by as a side track is limited as to how far away you can drill away from the main vertical exploration well.

Deviated exploration wells are very expensive and increases the complexity.

16ft thick sand (vertical thickness) is still more than thick enough to produce from, and a It depends on the pressure in the reservoir.

If they suspend the well, then there is still a good chance the sweet spot is very close to the current location. Suspending a well costs money.

If the well was a failure it would have be permanently abandoned, the fact it is not is a positive sign.

Suspending the well will however make a considerable time delay to any new production. You have to suspend it then wait for a new rig to be available to come back and drill a sidetrack. Probably minimum a years delay.

D220

Seems more on the agenda now :

While we believe in the importance of the UK Oil & Gas sector, we are now considering opportunities in other countries alongside those in the UK as we continue to seek to expand our portfolio and create value for all of our stakeholders."

Production for November just shy of 29k boepd : hedges rolling off & now significantly less than £100m lodged as security…. that alone opens up possibilities for talked of previously Special Dividends/Share buy backs (MF in previous investor presentations)..

Whilst the outcome of this drill is disappointing, the original well was planned to be plugged and abandoned on result of the exploration drill regardless of outcome, the fact the well has been ‘suspended pending the results of this further work prior to future potential re-entry and sidetrack’ I take as a positive alongside the term ‘new discovery’.. so all is not lost in terms on N’Eigg S’Eigg going forward at this stage..

North Eigg

The North Eigg exploration well 3/24c-6B has been drilled to a total depth of 16,728 feet in the Jurassic Heather formation and initial analysis indicates that, whilst the well has encountered hydrocarbons, commercial quantities have not yet been established. At the well location, the objective sands were thinner than had been prognosed but a total of 16 feet of hydrocarbon-bearing sands were encountered, and these have confirmed the presence of hydrocarbons at a deeper depth than in the adjacent producing Rhum field.

A full suite of wireline logging data has been acquired and our analysis is ongoing. We aim to determine if a future sidetrack location can be designed to better evaluate the volumes of hydrocarbon in this new discovery. It is our intention that the well will be suspended pending the results of this further work prior to future potential re-entry and sidetrack.

Final well costs will not be known until after the rig is off hire, but it is likely that the net after tax cost of the well to Serica will be around £13 million.

On the North Eigg drill , I’ve heard MF talk of the percentages of success you mention DennisTP…. & to be expected, but also i’ve read from the scoping study that I posted a link to previously, in the summary, last paragraph, last sentence :

• The well design is a standard four string full casing scheme with the reservoir section to be drilled in an 8.1/2” hole size. Conductor, surface casing, intermediate casing, and production casing. The requirement for a drilling liner was deemed significantly unlikely and the option has been discounted. The offset wells demonstrate that if the prognosed formations come in on prognosed depths and at the prognosed PPFG conditions then the well may be successfully drilled with a Rhum lookalike design. There is a high confidence in the subsurface prognosis based on geological similarity of the offset wells

Newkotb

100,000 share buyer first appeared yesterday late morning….

For anyone who hasn’t seen a summary of the N’Eigg drill :

https://www.nstauthority.co.uk/media/8201/serica-north-eigg-right-scoping-lessons-acces.pdf

NBP day ahead positive move again : 355.136 p per therm

NBP All Day D.A NBP D.A. 01/12/2022 30-Nov-22 1,380,000 370.000 340.000 355.136

Some fair size late trades reported also…

NBP Day ahead 318.744 p per therm.

NBP All Day D.A NBP D.A. 30/11/2022 29-Nov-22 430,000 320.500 312.000 318.744

Anyone have views on Jersey Oil & Gas ? a good tie up for Serica? I know Dickupham has a holding & possible view on this?

From their RNS this morning:

Following a recent period of fiscal uncertainty, confirmation of the retention of the investment allowance as part of the recent amendments to the UK's Energy Profits Levy is welcome, as we progress advanced commercial discussions with a select number of counterparties in relation to the Company's GBA farm out process.

&

Although multiple fiscal changes have slowed progress with closing out commercial farm-out discussions, we look forward to a successful conclusion if not by the end of the year then certainly in Q1 2023."

There’s been an operations update beginning - mid December historically, last years was on the 9th December, previous 15th December, as Maverick mentioned in a previous post most likely to include North Eigg results, would be nice if separate in the success case…

Article in the Telegraph worth a read :

Jeremy Hunt’s windfall tax on oil and gas giants must be watered down to avoid industry collapse, Tory MPs have warned.

The Chancellor has been told that his so-called energy profits levy is “too blunt an instrument” in its current form and risks “destroying” North Sea production altogether.

It comes amid warnings from companies involved in North Sea oil and gas exploration that the sheer level of taxation now poses an "existential threat" to their industry and will lead to investment becoming "unviable".

MPs believe that unless a “sensible” floor price is agreed, energy firms will be “crippled” with higher taxes even when their profits fall.

Discussions are underway among rebel MPs about drafting an amendment to the Finance Bill - which is expected to be returned to parliament this week - to address this point. Some backbenchers have written to the Chancellor to express their concern about the windfall tax, while others have made their disquiet clear to the chief whip.

Sir John Redwood MP told The Telegraph that the windfall tax in its current form is “excessive” and will “damage the industry” as he urged ministers to “see sense”.

“We need to get as much oil and gas out of the North Sea as possible,” he said. “I don't believe it is a windfall tax if it doesn't stop when profits fall - it is just another tax on business, another tax on a business that is temporarily generating a lot of income but in the past has had heavy losses.”

https://www.telegraph.co.uk/politics/2022/11/26/water-windfall-tax-energy-industry-will-collapse-jeremy-hunt/