Member Info for NewKOTB

See we have vast majority of NS O&G doing well today, some into double figure % gains, however for us with this diarrhoea of a deal our SP is in the sewers.

Our BoD have so many question to answer, news blackout from Malcy tells you this deal stinks for the regular PI. No chance of recovery of SP at least until the circular is produced after which, who knows what direction she will go. From being the darling of NS investments to this pathetic shambles of a deal in 3 months, how could ACW et al go so wrong so fast ! Is it just PI's that fail to see the benefit to shareholders atm or will others bring our BoD to task and knock some sense into them. and explain fully what that light at the end of tunnel actually is !

Under normal circumstances, even with WFT, shares at this price, would be snapped up and no way would we be anywhere near current SP for long.

FWIW, we gained another 50k therm/day (~860boepd) at full spot from 1/1/23 with our remaining Q1/23 hedging seeing ~20% increase on Q4/22.

aimo & dyor

BB,

Jesus Mary and Joseph and the wee donkey, that would concern me too.

Given benefit of doubt, looking more like a combination of our inept mgt have tried swimming with the sharks or 'off-book' deals have been struck.

Surely our advisors would see through Mercuria (Tailwind) as advise the deal should NOT happen and pay the £7m break fee and either do deal outside of NS or pay shareholders substantial dividends going forward and run down the NS assets.

aimo & dyor

BB,

"Shakey the Board this time would have to clearly explain why the KIST offer was inferior..."

Agree, however I do think any approach from KIST or ano for that matter would need to be 'leaked' in order for our BoD to address it formally via RNS, otherwise they will internally dismiss as not valuing us correctly, lol, yes you read that correctly ... even though our board see fit to give away control and 28.9% of our company for a meager 278p/s

PS Will we yet see an activist shareholder surface, I do hope so.

aimo & dyor

For third session running our SP stuck its little bootie above resistance of downward trend line on for it to get smacked back below, SP now flat atm. Could we be looking at 20th or 23rd as a pivotal day for our SP ?

As for KIST and AA, an offer in and around 1 yr average of ~380p I would consider acceptable given the turmoil over the past year, with all if not vast majority of it in cash, even 360p would probably get my vote atm.

aimo & dyor

What is in it for Mercuria ?

We know that Mercuria took a large slice of Tailwind dividend in 2021 and upon FY accounts for 2022 probably upped that too. So is the plan going forward to release ALL FCF after tax as dividends to shareholders, ie treat Serica in same vein as Tailwind ! In order to reduce tax clearly the utilisation of tax losses is crucial, then you have acquisitions cost off-set corporation and then interest payments on loans. Tailwind didn't keep much cash on their books, why ?

So, here's my thinking .... Mercuria will be the deal finder / driver going forward as already stated, "The Board believes this relationship will provide competitive advantages as the Company seeks out further value accretive transactions". Provide as needed, hedging and finance for further deals. So load Sercia with debt but at same time expand the company at a rapid rate. Our production will grow, revenue too along with debt but careful management will ensure big dividends are paid after tax as this is the only way Mercuira will see any sort of direct gain going forward for at least 18 months.

All, well 'n' good, however there will always be a price to be paid at some point given Mercuira and associated founders will hold 28.9% of enlarged group ... what that price will eventually be who knows, when will this 'debt' be called in, who knows. Will this deal result in improved SP, you would like to think so, but companies like Mercuria see value in deals outside of the nominal share price which may not translate into gains for your PI investor. Will Mercuira's ultimate destination be taking Serica private, once again, who knows, but it's a clear and real concern afaic.

PS Simply Wall St, fwiw, have SQZ showing fair value on discounted cash flow currently £12.05p. So even if our SP achieves half of that ~600p/s you have to once again question the need for such a deal ?

aimo & dyor

You have to question EXACTLY why David seen fit appearing to back ACW during AA's failed approach in July by buying £1.76m (@ avg 367p) in shares over 9 day period only to be now presented with this Tailwind (aka Mercuria ) Trojan Horse takeover.
Has David been duped along with all other PI's when we were told to 'strongly' take no action regarding AA's approach. For such a statement by ACW at the time of KIST approach, Serica MUST have already been in detailed cahoots with Tailwind / Mercuria on a deal that, so far to most appears one of the worst deals in recent memory of the North Sea.

Should get more detail on deal this week .....

aimo & dyor

SP,

When we completed BKR that deal was subject to SH approval due to it being as I understand it, a reverse t/o, whereas Erskine, as I remember, didn't require one, although I maybe wrong. Overall value of Tailwind deal is circa ~£644m inc debt, our current MCap is £778, so unless our SP falls below ~236p this would not actually be classed by Takeover Panel R&R as reverse t/o.

If above is the case then the only way to stop this deal in it's tracks, as it stands, is to vote NO on the proposed authorisation to issue an additional 111m shares. So please ensure you all vote.

aimo & dyor

SP,

"We have no evidence of any wrongdoing at present. It's unlikely that management would be so stupid as to make fraud obvious to chumps like you and I if indeed fraud was what they are up to, which I am not alleging they are up to... at this stage....." agree, however :

You mentioned "at this stage". Would knowingly entering into on what the surface, in my view, is an extremely poor deal for shareholders (for whom our BoD should represent) pass the test or would skating on very thin ice, esp if you read what Dickupham posted in relation to the context of "Fraud by false representation" come closer !

Am I saying there is an issue, no, but we are still in early days into this transaction. The circular needs to put ALL issues raised here to bed in full. FWIW I do think, imo, there has been clear SP manipulation and/or insider trading over the past 3 months on the build up to the Tailwind announcement, for obvious reason, but as I say, just my opinion.

aimo & dyor, views expressed are my own.

Final % notification 8.3 RNS's - total declared : ~62% ( COB 10/08/22) on failure of KIST approach.... wonder how many of these are happy for the deal to go ahead with the issue of +111m additional share capital at ~40% dilution to their holding or indeed how many still hold ?

Abrams Bison Investments 2.9
abrdn plc 3.78 (added since now 4.77%)
Acadian Asset Management 1.35
Allianz Global Investors 1.09
AXA Investment Managers S.A 4.92 (reduced since now 4.60%)
BlackRock 5.03 (added since now 5.45%)
BNP Paribas 1.32
Board Of Directors 2.669
Cairn Capital Limited 1.73
David and Monique Newlands 1.19
David Hardy 10.56 (added since now 10.57%)
Dowgate Wealth Limited 0.12
FMR 0.28
Hargreave Hale Ltd 2.7627
Hargreaves Lansdown 4.63
Ian Alexander Liddle 0.03
Janus Henderson 3.55 (reduced since now 3.52%)
Jefferies International 0.07
JPMorgan Asset Management 4.77 (added since now 5.08%)
Legal And General 0.13
Man Group PLC 2.852
Marshall Wace LLP 1.46
National Petroleum Corp of Namibia 1.1
Polar Capital LLP 2.85
Royal London Asset Management 1.22
Stonehage Fleming Investment 1.44

Goldman Sachs not listed previously, now 3.07%

Latest figures (in brackets) taken from SQZ site although it should be noted Serica for some reason have not updated their listing since October either.

Shareholder Register Analysis – 31 October 2022
https://www.serica-energy.com/shareholder-information

aimo & dyor

Probably better informing the: https://www.sfo.gov.uk/

Cavendish Energy accounts :

Interesting reading ....

https://s3.eu-west-2.amazonaws.com/document-api-images-live.ch.gov.uk/docs/t4xJggWesEur4pkQaRDy-PL7JTwM1FLoi9I9PoY-r3c/application-pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAWRGBDBV3A4OPTZFR%2F20221230%2Feu-west-2%2Fs3%2Faws4_request&X-Amz-Date=20221230T115453Z&X-Amz-Expires=60&X-Amz-Security-Token=IQoJb3JpZ2luX2VjECcaCWV1LXdlc3QtMiJHMEUCIQCK79claxaVJqJpKDBpywgf0XqzQ%2FPy6W5kfwqSBkD06gIgNgj3ctYa9wDMlsTEV0RqB6MxSg7KOIVnDYnU465%2FFlYqzQQIcBAEGgw0NDkyMjkwMzI4MjIiDKHqBKhkiY6Fo2bP%2BSqqBOKbeAcmhoAsuoNZ177HgDKfKTYLZSBEloVpik5HOt4tKEi4QOtQdpuQo5p%2Bs7i5ZqBBUJaVZmgZgZ8VckLljkepEZ8rDpQd8MTaCEkg%2FCZpHQhwlmVfXyU%2FdwQl5ur6GwXFulW8a8ZrLEKoIiqbVtPjSUOGMjiEX9rxvoTqzeOcCrT%2BhgNglvetmTFpPDemJBTzzgMrapnCF4sQ1ebn4FD3%2FB2b4a1O5cXCoUISBzFSy%2BKsXhGqIetkW91u3HQ7tKBHcB4hyYMgMsnjt7QNVi06rjc48gqZiFGvrLeeA9AmlhEfugUQQuM3icHyb2SNq1ZJLSYsFcGOac6P2ZXoKOt3kYJuTv2KRzYPNKxOpC6%2Fkfer0UMMJ7eyURX4Zfv8NLgdLpJzZx0tFBMWeJEx4%2BE1AVYk9KgIPdemmx52JScx%2FTpZcosMZibkSfZmgOy%2Blur%2FMryBan%2F5o6pa3MvnRJnSjXkYeejm8r4MY9iazTG5783v3j2Ntz991FbDN6Bkfno28LP9G0H4wPUMJnD6bslpRqkkuFvEjojBsFRHdkBHN43TwmVAoci0nFx2yxZmI%2B60EQeLncwUp0xz4Mv%2FhNedldeYarBiSu8mfAoJHV1FHuay0fcd8%2F2FLJnI9la9PZetJKoi9RJ%2FiLJpsulpndvaBFzg5dP5HcuP6XdDq%2BNvOEeyM7qAxnCSk0PoxlgbmupoJJKYa3WuZxFtH1CsKTgCd9hmby0i%2BtgqMMKbup0GOqkBEL6GslOFCjLnQCOA5KUY5P4eH%2BiLfWSn1nr%2Bd4t8n4T5Dby4F6xoZPz1%2F8EDpKYvYgn6EfKzaqqe%2F%2B55qksQuxLnxIpPifA6thEDMBubv%2Be40zEl4mCOSu4qBwvPGAWxn28YsxA7915eDasv7kfBIU98B4M3VwOq9ckzDZK7r5asT5F%2FHMY7Ng29m0w%2B%2BHWEGM1G9YQ%2FKw%2BmZR6rn9HX65PWTOnf4dvrQA%3D%3D&X-Amz-SignedHeaders=host&response-content-disposition=inline%3Bfilename%3D%22companies_house_document.pdf%22&X-Amz-Signature=54ca2e234a5da169dd70af3d5a02bda2669db96650cbf0c2c88e9ad12ef6deea

So if Cavendish Energy Holdings Ltd are a separate entity to Tailwind (Mercuria) but both currently own Tailwind, what is stopping Cavendish Energy Holdings Ltd buying significant stock and forming a 'partnership' at a later date to decide on Serica's future. Mercuria can not acquire more Serica stock for 18 months, but nothing to say Cavendish Energy can't, or may have done so already !

"In addition, Mercuria has agreed not to acquire any additional shares in Serica or announce any takeover offer or potential takeover offer for Serica (subject, in both cases, to certain customary carve-outs) for a period of 18 months following completion of the Transaction."

Also Freeman & Ujejski are directors of Cavendish Energy and once their 'temporary' role is over no guessing what their interest will switch too ! You then have other companies linked to Freeman and/or Ujejski (Cavendish Energy), being NSVE HOLDINGS, NOVA ENERGIA, DSRG LIMITED.

"Dave Freeman (COO of Tailwind) and Tom Ujejski (GC of Tailwind) will have temporary transition roles in the enlarged group"

Ho humm .... as you say Info, 'all a bit smelly', that's big business for you !!!

aimo & dyor

Biggest deal to go down in the NS since WFT and we hear absolute zilch, zip, naught, nothing from Malcy ....

He has clearly been told to keep from posting, if you ever needed proof that he was not independent reporter then this is all the proof you need.

aimo & dyor

FoT,

What should be clear even to those who refuse to see is, without a doubt, this deal is an un-explicable 'U' turn in 'strategy' from Mitch et al afaic.

Also, what what will happen after the deal ( should it succeed ) is Andy Bell our current CFO will be replaced by current Tailwind CFO, Jacques Tohme , as stated by Tailwind 'within 9 months' .... For me, I can see that happening within 3 max if not upon deal completion. Deal will not only then ensure Mercuria have control of voting right but also control of finances too.... in other words, virtually total autonomy with our company !

So, some may say ..... and the issue is !

Well, on the 20th upon announcement I read Tailwinds 'view' of the deal, remember they are not bound by LSE RNS rules and found this extract most concerning AND missing this key statement from our RNS :

"Jacques Tohme becoming CFO within 9 months of completion, subject to approvals..."

https://www.tailwind.co.uk/Proposed-combination-with-Serica-Energy-Plc-via-sale-of-Tailwind

Now, the above quote has been REMOVED from Tailwinds site .... Do they not want Serica's shareholders knowing about the future intentions of who would 'control' our finances.

Trojan Horse takeover of Serica is underway with full backing of our BoD afaic.

aimo & dyor

“Ey ‘up” !!!!

BB,

Volume was decent yesterday with following trades > £100k :

tradeTime currency price volume tradeValue type micCode tradeType venueOfPublication
2022-12-28T16:35:11.017 GBX 287.5 164382 £472598.25 UT AIMX P
2022-12-28T17:41:20.000 GBX 282.363 130081 367300.614 Off-Book SINT P ECHO
2022-12-28T17:23:26.000 GBX 282.661 110242 311611.1396 Off-Book XOFF TNCP ECHO
2022-12-28T12:42:14.840 GBX 283 84488 239101.04 AT AIMX P ALGO
2022-12-28T12:24:14.207 GBX 281.19 63673 179042.1087 Off-Book AIMX P AIMX
2022-12-28T12:45:02.830 GBX 284 44403 126104.52 AT AIMX P ALGO
2022-12-28T17:34:45.940 GBX 283.377 41756 118326.9001 Off-Book XOFF TNCP ECHO
2022-12-28T14:23:33.190 GBX 287 35870 102946.9 AT AIMX P ALGO

Volume 3.03m with 2096 trade of which we did have a very high % of 'AT's occur, 88.2%

Pembridge Cap
@pembridge_cap
·
Dec 22
Replying to
@MitchFleggCEO
We are excited about the huge market discount attributed to $SQZ for adding scale to one of the world's largest capital destruction track records. We look forward to voting with an activist team dislodging the Serica management team.

https://twitter.com/search?q=%24SQZ&src=cashtag_click

Hope everyone kept their minds off SQZ during Christmas ... lol, as if !!!

I was thinking 'out of the box' and maybe, just maybe the Tailwind 'deal' is supposed to be seen as unpalatable for investors in order to awaken / spur-on takeover interest in SQZ ... OK, £7m break clause is not ideal but if it achieves the desired results, would be money well spent.

So we know that Mitch et al have been struggling to do a deal for 5 years that ensures we don't overpay, yet this deal on so many metrics certainly ensures we do OVERPAY.
Then we have doubling down on NS assets at the time when taxes have never been higher and political instability so worrying.
Not only that but SQZ have gone on about Nat Gas being the transition fuel of the future, yet this deal we are happy to 're-balance' our portfolio by acquiring assets with 86% oil production.
Added to which SQZ have been prudent to ensure we don't take on debt, ( last time was 2007 ) yet this deal ensures we acquire Tailwinds debt, not just a few million but a massive ~£277,000,000 .
Then the ridiculous dilution to the tune of ~40% for current holders, once again, not since BP's Erskine in 2015 did we use equity (5%) to fund a deal. However in 2015 unlike today, Serica were not cash rich with substantial FCF .... in fact the opposite.

As I say, bit 'out of the box' and verging on possibly insane but for me nothing in this deal makes any sense with Serica in effect doing the equivalent strategic manoeuvre that is akin to a handbrake turn on M25 at rush-hour then flooring it into head on traffic !!!

aimo & dyor

Interesting one for me is WHY exactly are Mercuria so insistent upon Serica remaining on AIM ? Mercuria also ensure any relationship agreement will end if they hold 10% or less of share capital. So Mericura are not happy to be diluted themselves but more than happy to dilute current Serica holders to the tune of ~40%.

"The Relationship Agreement will terminate if Mercuria and its affiliates hold in aggregate less than 10 per cent of Serica's issued share capital and may be terminated by Mercuria if, among other circumstances, Serica's shares cease to be admitted to trading on AIM"

Also, Mercria will be entitled to add a 3rd NED to the board too :

"Mercuria may nominate a third NED provided that the shareholding of Mercuria and its affiliates remains at 20 per cent or above of Serica's issued share capital..."

Off to prep for tomorrow now .... Happy Christmas to one 'n' all .

aimo & dyor

NS,

"Ashurst is a quality outfit..."

That could be so and not the real issue here afaic, even if this 'maybe' (which it is not imo) an excellent or even palatable deal for SQZ holders, what Ashurst can not or anyone else for that matter know is, what are :

FUTURE INTENTIONS OF MERCURIA !

Only they will know that, regardless of any discussion, promises made by Mercuria at point of negotiations esp after 18 months lockup ends, gloves are then fully off, 28.9% control of Serica is unacceptable, period ! That's the type of control a distressed company would offer, have we overnight become one ?

PS. Anyone notice the actual URL header header data for the Tailwind Presentation :

https://www.serica-energy.com/downloads/presentations/Volcano%20Investor%20Presentation%20-%202022.20.12.pdf

Yep, Serica aptly named it 'Volcano' ..... really !!!

aimo & dyor