Member Info for Megla

DTP,

Nice to see there’s some positivity left after the string of disappointments from the company.

I keep reminding myself that the oil is still there, always better to have topside issues that issues with the field.

The CEO will be desperate for some good news after all his talk, so have zero doubt all the best efforts are going into getting the FPSO shipshape, whether that is enough or not remains to be seen.

In my view, Serica, and the likes of Kistos & Enquest need to adapt to the current market, and that for me means consolidation. All three companies have failed to deliver shareholder value over the last few years. Granted the main problem has been government policy, but arguably they’re now too small to operate successfully in a cyclical industry with such a punitive tax rate and where access to credit is becoming incredibly difficult.

The only issue for Serica is its bullet proof balance sheet has been weakened by the 9 months of constant issues with Triton, which does make deal making more difficult. I had presumed at one point we’d be looking at a billion dollar deal, that doesn’t really seem plausible now.

Ithaca and ENI did the right thing, let’s hope Serica can do something to lift the gloom.

FC,

The licence was in operation during the last Trump administration, so it’s unlikely to be an issue. I asked the same question of IR and they said the lack of a long term renewal was due to the changing of the guard across the pond, basically a timing issue. Although they couldn’t guarantee there was zero risk, they were confident in a new long-term licence being issued.

Welcome to the forum.

Mommur, it’s the lack of FCF that concerns me with the dividend. 3 months of limited production from Triton and a shutdown to come, suggests that net debt will need to increase to maintain the current rate. I don’t have a massive problem with that, but the company does need to maintain a strong’ish balance sheet if they want to continue to grow by acquisition.

I’ve avoided Enquest mostly (except a couple of short term trades) but I do think they’re starting to look attractive. Debt is down to a manageable level, lease costs are reducing, FCF looks decent for this year, and of course they have a mountain of tax losses that can be utilised in the future. I’ll certainly be buying if they manage to complete on a deal that will accelerate the use of their tax loss position (but not until).

It is very frustrating, especially given the noises from the CEO about us becoming best in class when it comes to operational performance.

From a FCF perspective, the under performance of the Triton area is killing us. Gas prices are strong, but we have a 78% tax rate and very little CAPEX to offset it. The Triton area is where the investment and tax losses are, which provides nearly tax free production.

I hope the dividend is maintained, just so I'm getting paid generously whilst the issues are worked through. I also hope the company merges with the likes of Kistos or Enquest to reduce risk.

Better days ahead (hopefully).

It is all hugely disappointing. Mr Cox will feel like a prize plum when it comes to presenting the full year results. All the talk of improved production guidance and we’re having to change it in February.

Q1 is mostly a write off for Triton, which means the last 9 months will have yielded, on average, about 4kbopd. If Serica hadn’t bought Tailwind it would likely be at a firesale price right now.

But that would only leave $50m for dividends, unless the company wants to for further into debt.

Https://www.serica-energy.com/downloads/research/SQZ%2018.02.2025.pdf

Definitely a buying opportunity if investors believe the issues will eventually be resolved.

The obvious hope is some maintenance can be brought forward to reduce the duration of the summer shutdown.

Hugely disappointing news. Got to wonder if this will impact the divi.

There are 3 certainties in life, death, taxes and the Triton FPSO being offline.

Fundamentals? A loss making business that has to refinance over a billion in debt. Those fundamentals?

Only hope is a suitor steps up so it doesn’t get thrown to the wolves.

The company doesn’t have billions in assets. Goodwill and intangibles can’t be sold to reduce debt.

After all the problems and with their credibility in tatters, why would the creditors roll over the debt next year? It’s not as though the company is going to many options when it comes to the refinancing.

Of course there have some time to try and sort out the mess, but the market is rightly pricing in the risk of debt for equity.

In my view, debt for equity the likely eventual outcome. I just can’t see a scenario where anybody will be willing to roll the debt. That said, there’s always the chance of a buyout before that happens.

Agree Sekforde, Gas price assumption is too low given the forward curve. Hopefully the company is hedging into the current strength.

I think the 40k is there to be beaten with the recent production additions but I’m glad they’re being cautious.

With a decent performance we should be net debt neutral by end of Q1. Maybe we’ll see an increase in the dividend if uptime is better than 80%.

Sadly, Labour are still a basket case. They’re all out for growth yet can’t create the right conditions for the company to sign off on a billion dollar investment. Total clown show.

I’m in at 400p average. Will build my position overtime. Labour aren’t making life easy for anyone, but there’s a decent risk/reward here.

Labour have no clue what they’re doing. Their energy policy is a total shambles.

This is from an article I read this morning:

“She (Reeve’s) has also asked ministers to draw up alternative plans for securing growth and cease anti-growth measures"

The irony given her taxation policies is just too much to take.

Decent update. Coming in under the reduced guidance isn’t great, but the important point is current production is strong and expected to increase further.

Same, just in profit (healthy profit if dividends are included).

Oil & Gas both doing well, just need some good news about the Triton FPSO to really start making the shorts think about closing.

IR can’t provide any information that hasn’t been released to the market (as we know).

But they did guide to lag between the completion of repairs and the resumption of stable production, which would make sense due to startup procedures, safety checks etc.

I guess we’ll just have to wait for the RNS and hope everything is proceeding as planned.

I don’t agree with the no windmills part, but the Labour governments policy on O&G is idiotic and deserves to be called out.