Member Info for NewKOTB

Interesting U turn in play atm, thanks to Putin and Rishi

https://www.agcc.co.uk/news-article/six-new-oil-and-gas-fields-to-be-fired-up-as-sunak-takes-action

Both Shell and BP along with a minnow or two and PE's are involved in these .... wonder if the IOC's will need to sell off other mature fields to keep their commitments towards reducing carbon emissions.... guess they will.

aimo

QC,

"AA wouldn't lay about with £200 mln cash...."

To be honest, don't think many producers in our situation needing growth to sustain momentum would sit on >£200m in cash and added availability of RBL would do so ! SQZ need an accretive deal and soon (not some wild-cat drill) otherwise come full EoY results in April, think many will be asking as you suggested, are ACW et al up to the job of maneuvering SQZ into the position of a recognised leader of true mid-tier NS producer bursting with vision and ambition.

From latest presentation SQZ stated "The UKCS presents a wide range of merger and acquisition opportunities", so it begs the question, why have we not done any deal of any kind for 5 years now, yet others manage to !!!

Talk the talk, now walk the walk.

aimo & dyor

Volume back up again, 1.43m with 86% of 761 trades by BoT's

Trades over £50k ;

tradeTime currency price volume tradeValue type micCode tradeType venueOfPublication
2022-02-04T12:44:26.000 GBX 246 207325 £510019.5 Off-Book XOFF TNCP ECHO
2022-02-04T12:59:02.000 GBX 246 99997 245992.62 Off-Book XOFF TNCP ECHO
2022-02-04T13:38:29.937 GBX 255 50000 127500 Off-Book AIMX P LRGS AIMX
2022-02-04T16:35:24.043 GBX 258 31377 80952.66 UT AIMX P

Interesting single SINT share traded on opening. Brent exploded during the day to well above $93/barrel and held majority of gain on closing. NBP closed slightly up at 195p/therm.

At this rate, SQZ are adding cash of ~£13.9m (~5.2p/s) or ~2% of our MCap per week, post Opex/Hedging/Capex on 30.3kboepd , unbelievable but true !! Remember, SQZ are debt free too.

PS. Still chuckling to myself regarding AA's comment about Mitch yesterday. Guess Mitch will have already been told as I would have thought everyone in SQZ's office will also know by now too ... lol

Come on ACW et al, time deal got signed off !

aimo & dyor

CCUS in effect makes gas green and will be the technology to invest in, gas is not going anywhere any time soon.

https://www.ge.com/content/dam/gepower-new/global/en_US/downloads/gas-new-site/future-of-energy/decarbonizing-gas-turbines-ccus-gea34966.pdf

Just hit long term resistance trend going back to Nov 2018, having broken it twice before (late Dec & late Jan) I'm looking for close above 255p. Third time lucky will hopefully, with a meaningful break above, move us up yet another notch into blue sky's. Shorts will be clearly worried about recent events that favour SQZ so will need to close out, with BoT's today looking likely to aid the move up atm.... Let's see if the old girl can do it, we shall see !!

aimo & dyor

EC,

I go by the reported hedging which is shown to be for gas therms / volumes only, so I can assume (hope) there is no need to hedge Brent as we are imo over hedged at around ~6kboepd atm. Don't think SQZ have ever said explicitly they hedge oil afaik. SQZ also stated they have added no more downside protection hedging since July last year either.

atb
aimo & dyor

EC,

Correction :

It's ~80% of gas that's un-hedged, oil at >$91/barrel is un-hedged so we are receiving full spot for full 100% production.

Gas now represents >85% of production.

"The majority (>80%) of Serica’s oil and gas production is now unhedged allowing the company to benefit from the current historically high gas prices and strong oil prices..." extracted from latest presentation.

PS Sorry for my previous mistake, atb.
aimo & dyor

EC,

It's 80% of gas that's hedged, oil at >$91/barrel is un-hedged so we are receiving full spot for full 100% production.

aimo & dyor

With Brent now >$91/barrel and NBP up again today >+2.2% (197p) you have to wonder what gives !

I would say once those pesky shorter's closeout the BoT's will release our SP ... just a matter of when . Too much external pressure, let alone our cash build for our SP to be reacting as it is, esp now the market driven 'fear' of windfall tax has been shown to be a none event.

aimo & dyor

See DT is worst performer of FTSE all-share in last 3 months as listed in IC :

Fallers 3 months Price (p) Return (%)
Darktrace 389.4 -42.9%
Trustpilot Group 180.9 -42.6
Oxford BioMedica 876.0 -42.5
Cineworld Group 37.7 -41.3
Avon Protection 1141.0 -41.2
Funding Circle 96.0 -40.9
Ted Baker 88.2 -35.6
Countryside Partnerships 301.2 -35.6
Superdry 201.0 -35.5
Made.com 102.8 -34.1

You know what they say, what goes down must come UP.

aimo & dyor

Volume lower than recent days, 644k with 82% of 525 trade by BoT's

Trades over £50k ;

tradeTime currency price volume tradeValue type micCode tradeType venueOfPublication
2022-02-03T16:35:07.050 GBX 245 54458 £133422.1 UT AIMX P
2022-02-03T18:01:05.000 GBX 241.456 23870 £57635.5472 Off-Book XOFF TNCP ECHO

With Brent well above $90/barrel (highest level since Oct 2014) and NBP finishing up 5.4% at 193p/therm hope we are able to claw back recently lost ground.

aimo & dyor

Flexmw,

Yep, O M G ..... talk about having a dig at your neighbour !!! Just finished watching it too !!!! Had to replay it several times just to make sure I heard it correctly and watched AA body language too.... lol

I loved his reply .... also just goes to show how AA operates and promotes his company whilst our board warm their toes in front of the fire with their slippers on and knee blanket, no doubt counting their LTIP's. Lots of interesting points aside from direct link to SQZ.

Malcy also asked for questions to put to AA from shareholders too.... so glad you put that one forward !!!! :-)

atb & well done

aimo & dyor

Love his reply just now to why windfall tax is NOT an option, when Labour are shouting for one.

Rishi for PM.

aimo & dyor

Mommur,

I'm in no way trying to say ACW et al have not done a fantastic job to-date, clearly as you pointed out, they have but I do feel as if we need new blood at the top, re-invigorate the company. KIST have now completed 3 deals in last 14 months, where as SQZ have been continually living off BKR deal for the past 5 years. About time we had a shake-up, our board are getting to use to their slippers, blankets and LTIP. Shareholders and future investors need more than a 'risky', imo, drill to look forward too.

flexmw, agree.

aimo & dyor

SP,

"probably better coming back in September or later in the year..."

With AA that's a dangerous game, as I can easily see yet another deal done or being brokered by then for either full sale or another accretive deal. Our SP can turn on a sixpence, that's 2 1/2 pence in new money btw but as we no longer have 1/2 pence's, lets round it up to 3p.

aimo & dyor

aimo & dyor

"representing a 7.1% yield" ..... so SQZ should, in that case look at ~17p dividend imo.. lol, if only !!

In the meantime the squeeze on our SP continues ....... now if only we had a pro-active PR department.

flexmw, "Definitely could do with a shake up!..", agree, I will be voting against re-appointment for either or both ACW and Flegg unless things improve.

aimo & dyor

Low'ish volume today, 870k with 80% BoT trades.

Trades over £50k ;

tradeTime currency price volume tradeValue type micCode tradeType venueOfPublication
2022-02-02T16:02:36.627 GBX 239 50000 £119500 Off-Book AIMX P LRGS AIMX
2022-02-02T14:41:39.010 GBX 241 40923 98624.43 AT AIMX P ALGO
2022-02-02T16:35:21.260 GBX 239.5 28332 67855.14 UT AIMX P
2022-02-02T11:50:55.863 GBX 242.25 27717 67144.4325 Off-Book XPOL RFPT P XPOL
2022-02-02T15:16:54.430 GBX 237 25628 60738.36 Off-Book SINT P ECHO
2022-02-02T11:50:42.253 GBX 242.25 25000 60562.5 Off-Book XPOL RFPT P XPOL

Total CapEx for 2022 I estimate to be £60m (£43 N Eigg / £17m workovers) . Eigg rig contract for Transocean Paul B. Loyd Jr will run / should run for between 70- 90 days imo, at last known day rate that's between $11.2m (£8.4m) - $14.4m (£10.8m) afaik. No idea cost of equipment etc but as you say this is SQZ, so could well be finger in the air as to final costs if compared to R3 HPHT well, however I would be dumbstruck if costs exceeded SQZ estimate of £43m, gross. Columbus Maersk drilling contract was for 70 days with contracted value of $8m (£6m).

aimo & dyor

So what would an additional 10% corp tax actually cost us. I would estimate for 2021 tax year, around ~£10m as absolute maximum imo, yet our SP fell £27m today alone on fears of such a windfall tax. We may even end up paying nothing, as both current tax losses and our £115m lodged for margin hedging will reduce our final calculated sum. Remember Shell and BP paid no corporation tax or production levies on North Sea oil operations between 2018 and 2020 and I would expect the same for 2021 from them too !!

aimo & dyor

Any tax would need to be on profits imo, as SQZ have already wisely set about minimising any tax with clever accounting due to SQZ have 'chosen' to lodge such a massive amount (£115m) in the 2021 financial year for 2022/2023 hedging commitments that would reflect on our P&L so reducing our profit and by default any windfall tax due too. So maybe the poor hedging is actually a blessing in disguise. Who knows, as I don't consider myself any type of specialist in the area of taxation.

aimo & dyor