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This is the bit I like, we'll see because at the end of the day this is what they get measured against:
"Significant net cash position on completion and highly cash generative portfolio increases capacity for future M&A, organic investments and sustained cash returns to shareholders"
Wonder if the market see's this in this circular - exciting times!

Good one Banburyboy! A lot good work there. Still some questions there, but I've had enough for now. All I am hoping for now is that having read all our concerns (Mitch does read all of this by the way), some of which is bull, he can do an exceptional selling job and persuade us to trust him and his team in doing a thorough analysis of this proposal.

I think I have calculated Mercuria's current shareholding in the Group which includes; Cavendish Energy Holdings Ltd and it's subsidiaries:
The total deal is worth £367m + £58.7m + £53.9m(3.7% shares) = £479.6m I hope I have got this right.
So Mercuria's stake in Tailwind must be in the order of 75%
Tailwind's existing debt facilities comprise a $425 million senior secured RBL with a syndicate of banks of which $400 million is currently drawn and which is amortising until fully repaid in 2027 plus an undrawn $50 million junior revolving credit facility ("Junior Facility") with Mercuria affiliates which matures in 2028 (collectively the "Tailwind Facilities")
There is also the royalties and decommissioning costs which stood at approx. £113m as at 2021 - to be confirmed
That's a lot of downside. Someone correct me if this wrong!

So, to be fair to Mitch he didn't need to speak to the likes of me, but he did for 40minutes.
He could only tell me so much obviously and I need to respect that but on the points in the email:
1. He has many people scrutinising accounts and wants to concentrate on the future but could/would not answer our concerns about 'where the cash gone and the loans are still there' He was not able to tell me about Tailwinds current position re. dividends/loans, but again stating they are sure they are buying into a great asset that will leave them with £200m cash. Regarding royalties and decommissioning costs, again he doubted my figure of $136m and the timescale (I will need to check this again)
2. Mercuria stake in Tailwind, all I can say it is not 25%+ If its public knowledge what it is I will post it. But any other figure does change the valuation of this deal.
Suffice to say the share deal Mitch thinks is very fair.
3.Cost per barrel will be circa $20, and production might be different to the headline rate of 45,000 barrels/day (I think someone already posted they though it will actually be more like 50,000/day
4. Again did not want to dwell on the past regarding the workings of private companies and their dividend policy.
5. Regarding tax losses, very confident that these could be used - more detail to follow in next weeks notice. Still reluctant to put a figure on this in case this was highlighted.
6. Sees Mercuria as key to future projects/investments with their connections and access to world markets
7. Interestingly, as stated before, buyback and dividend are very much on the table, just when I thought all their cash might be needed; much improved hedging requirements ~ £40m down from a peak of £300m
8. Very much focused on new opportunities
I did express our concerns about the lack of selling Serica effectively and modest/poor incremental growth. Mitch recognises this and as from next week hopes to start addressing that - hooray!
Mitch remains convinced this is a good deal and not planning to retire soon, the key thing for me still is, and I will try and find out is just how much of a stake does Mercuria have in Tailwind?
I thank Mitch for his time, he did seem very set on this being a good deal.

Mitch is phoning me back.... Any last minute questions?

continued..
Reduction in value of Tailwind reserves as a result of WFT has not been factored in. You can say that it equally impacts Serica and Tailwind and that is true. Except that Serica has approaching £0.5b in cash and Tailwind £0.25b of debt which is not impacted by WFT.'
'The cost per barrel from 2021 financial statements. operating costs were $166m (note 11 of financial statements) and total barrels sold were 5.1m (14,000 per day). This excludes depreciation of production assets which would add another $20 per barrel. Accordingly all in production costs are $52 per barrel and admin and interest a further $8 per barrel. 'Royalty, deferred consideration and decommissioning adds a further $3.5 per barrel. This results in an accounting breakeven of $63.5 per barrel which must be highest in North Sea.'

4. Cavendish/Mercuria have over 2020/21 declared and taken $108,219,000 of dividend. What dividend they have declared this year? It's very apparent where their motives lie. Loans have increased during this time to $344,599,000.
5. The true worth of the ‘ring fenced tax loses’ to Serica, given the current climate and likely Labour Party stance on this
6. Other comments made include ‘idle promises’, ‘jam tomorrow’ when assessing the value of Mercuria in this deal who freely admit they want out of fossil fuels asap. 'Is the future in the North Sea, with an asset that has limited resources and huge liabilities?'
7. What is meant by ‘"We will have to look at other methods of returning cash to shareholders,” more promises.
8.'Following the acquisition of smaller rival Tailwind...Serica will focus on opportunities in other European countries and possibly North Africa' why does this have to follow the acquisition?

This is truly the feelings of the PI, I hope that your Chairman and Board take note, as the likelihood of support for this acquisition is slim.

Regards

Sent an email to Mitch just now, sorry if it does not include everything:

Hi,
As a private investor I think I speak on behalf of many regarding huge concerns over the future of Serica Energy should this acquisition take place. I am sure that your auditors are continuing to carry out due diligence on Tailwind and their officers and establishing its true assets and liabilities in evaluating its commercial potential.
I am an active contributor to share chat platforms and the #sqz twitter page, which I believe are good gauges of how the current PI sentiment is.

The concerns are numerous and I for one, would like assurance that your advisors, along with the BOD have fully appraised and factored these in, in reaching your recommendation to acquire Tailwind Energy:

1. Current directors/officers/shareholders of Tailwind/NSV Energy/Talwind Energy Investments LtdT/Tailwind Energy Holdings LLP/Cavendish Energy Holdings/Mercuria/ Nsve Holdings Limited/ Terranova Asset Management Limited/Dsrg Limited/ Nova Energia Ltd/ Nova Venture Holdings /Terranova Asset Management Limited, at the end of 2021 they transferred all the cash made by Tailwind to NSV Energy all $105m of it. Looking at pages 46/47 of these NSV 2021 accounts Tailwind had precisely $6 in cash. The royalties and decommissioning liabilities were $136m and loans of $344m.

Has any one looked at these companies' 2022 provisionals? How much cash has been taken out during 2022? Why were no loan repayments made? Dsrg Ltd is David Freeman and had over £6.2m sitting in it at the end of 2021. Nova Energia Ltd is UJEJSKI, Tomasz Zbigniew Harding had over £7.8m sitting in it, Nova Venture Holdings run by TOHME, Jacques Joseph and had over £9.1m sitting in it. I think you get our thoughts about your proposed senior management team.

2. Mercuria have 25%+ stake as far as I can see and the five principal officers/directors of NSV Energy hold a majority. so whilst they may be the 'largest ultimate shareholder' Mercuria only have 25%+ and for this they are receiving a whopping £367m of SQZ shares. The other majority stakeholders are walking away from massive debt, royalties and decommissioning costs and receive their share of £58.7m and an extra 2.7% stake in Serica for their troubles, having milked Tailwind of all its cash.

3. Other observations: 'We are proposing to pay $18 per barrel for Tailwinds reserves after adjusting for debt (assuming debt has not been reduced since 2021). If debt has been been fully or largely paid off in 2022 (highly unlikely as I am sure big dividends will have been taken) then valuation drops closer to $10 per barrel. Accordingly Serica is paying over triple the maximum value you would place on Tailwind reserves assuming long run oil prices of $75 per barrel after impact of WFT. While we have had a strong oil (and gas) price environment in 2022, I note that the super majors are all using a conservative $55-60 oil price expectation to evaluate investments. Reduction

"we will have to look at other methods of returning cash to shareholders," Flegg said.
What the f**k does that mean?

'Following the acquisition of smaller rival Tailwind...Serica will focus on opportunities in other European countries and possibly North Africa' why does this have to follow the acquisition?

SQZ calls the shots. We have the cash. Let's not give it all away to idle promises and city sharks.

Good one Fool-On-The.
Apart from this promise of jam tomorrow, other major uncertainties are the value of the so called 'ringed tax losses', especially with labour looking to close loop holes in this area, the royalty and decommissioning costs, the level of debt that SQZ would be taking on and someone mentioned the higher cost per barrel that Tailwind have.
I think you will find that the current owners of Tailwind, which have been well documented, have milked this asset and can't wait to walk away from this.
I believe that SQZ can use their strong position, not by giving away and committing $1bn of their assets, but by investing in other projects with transition in mind.

Am I right in saying he needs support 75% in value of shareholders to pass this hair brained deal?

It feels as though Mitch has succumbed to the gentle heaving bosom that is Mercuria and our No.1 bandit Mr Tohme who has been asset stripping all his working life. What worries me short of having offshore accounts, is how the NSV/Tailwind 'persons with significant control' have gone out of their way to hide where the Tailwind cash has gone. The only thing on their minds is to sell Ronaldo before he becomes a total liability and get the hell out. SQZ are receiving massive debt, commissioning and royalty costs and lets be honest prices are set to drop and there is limited life left in them there fields. All these wishy washy promises of Mercuria being a useful partner, ringed fenced tax losses etc., are not quantifiable yet Mitch has been taken in by this 'we've got our arm around you' rhetoric. Mercuria want out of fossils asap, SQZ are a vehicle for that. The 5 banditos, now 6 with Mitch, are trotting over the Savannah into a setting sun.

Any suggestions grateful, hopefully when Mitch delivers the Notice of General Meeting with related explanatory circular imminently, there will be loads of helpful ways by which we can express concerns/ask questions etc? The Hardy's are an obvious audience. I would imagine the rest will have people who do nothing else but look at deals in great detail.
Mr D and Mrs D Hardy* 28,846,114 10.57
BlackRock** 14,857,084 5.45
JPMorgan Asset Management 13,873,151 5.08
abrdn 13,005,360 4.77
Hargreaves Lansdown Asset Management 12,628,922 4.63
AXA Framlington*** 12,553,868 4.60
Interactive Investor 9,920,289 3.64
Janus Henderson Investors 9,599,058 3.52
Goldman Sachs

Rather email Mitch direct, but was hoping that someone with a better professional background than me (Engineering degree, ran my own company for 25 years badly then became a maths teacher) might know how do these things better.

The royalties and decommissioning liabilities were $136m and loans of $344m as at end of 2021 - what are they now?
$480m due within 5 years + $70m to the 5 Banditos = $550m
$436.4m shares to Mercuria
That's the downside - total $986.4m given away before we've even started.

Basically Mercuria have 25%+ stake as far as I can see and the five Banditos hold a majority. so whilst they may be the 'largest ultimate shareholder' they only have 25%+ and for this they are receiving a whopping £367m of SQZ shares - oh thank you Mitch you daft pillock. The other majority stake - how are our 5 banditos getting their slice I wonder? by walking away from debt, royalties and decommissioning costs and £58.7m LOVELY, JUBBLY!!!!!!!!!!

Dsrg Ltd is run by David Freeman and had over £6.2m sitting in it at the end of 2021
Nova Energia Ltd run by UJEJSKI, Tomasz Zbigniew Harding and his mrs? had over £7.8m sitting in it
Nova Venture Holdings run by TOHME, Jacques Joseph and had over £9.1m sitting in it
Lovely Jubbly!

Nsve Holdings Limited has our five banditos as officers and Dsrg Limited, Nova Energia Ltd and Nova Venture Holdings as 'persons with significant control.
LimitedTerranova Asset Management Limited has Dr Stephen Cross Edwards as the majority shareholder

I'll do some more when I can be bothered, but it is very apparent that all Tailwind's cash has been syphoned off nicely.

Cavendish Energy Holdings have the following shareholders:
+50% Nsve Holdings Limited
+25% Terranova Asset Management Limited
My god! where's this leading to?