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Right, I mentioned yesterday my surprise about a certain sentence in our RNS ...

"A rig has now been contracted for the drilling of the high-impact North Eigg exploration well in the summer of 2022.."

Now, setting aside the total and utter lack of technical detail to-date for N Eigg, why 'sneak' in the announcement of a rig for N Eigg, surely that is worthy of an RNS in itself as per R3, btw a rig contract that would have been signed off sometime ago.

https://www.lse.co.uk/rns/SQZ/drilling-rig-contracted-for-rhum-3-intervention-5o7kzb3e9hg6z5p.html

Then you have the Scooby-Doo esk mystery of the un-named rig we have contracted !

Why oh why do SQZ feel they need to keep this basic information a secret.

Well my guess is one of two events have influenced their decision NOT to include rig details in any shape or form :

Firstly, we are in discussions about a farm-in partner who have asked for these details to be kept confidential for the time being.

Secondly, SQZ new owner likes to keep their commercially sensitive business to themselves, a must for Private Equity.

Might just be me reading too much into lack of clarity from our board, then again !

Appears SQZ search for farm-in partner to acquire up to a 45% interest in Eigg has ended, for one reason or another as we have been removed from the listed mandates available for NS investment opportunities !!!!!

https://www.stellarlimited.com/north-sea/

Make of that what you will ... ;-)

As I say ... HUSH, HUSH !!!!

aimo & dyor

https://youtu.be/3BBsF7VIQyo?t=223

To be continued .....

D220,

"I suspect that £1m sell at 16.17 is the Hardys getting ready for Christmas shopping!"

To be fair, I would hope so ..... our Board appear hellbent on playing scrooge this Xmas with OUR cash pile.

aimo

Maverick,

"Surely the current institutions would be knocking on SQZs door and saying show us our money.."

Exactly, esp the Hardy's, who are currently sitting on ~£66,000,000 of untapped spoils.

Malcys take is a little subdued compared to previous posts on SQZ ..... humm, was he asked to tone it down ?

"Serica continues to deliver and operationally is in very good shape. Obviously the market for gas is a huge plus but even on more sanguine numbers, which I don’t believe we will see much of in the short to medium term, Serica is in very good shape. This is partly due to its exceptional team at all levels of the business and whilst they will look beyond North Eigg for M&A opportunities they are not needed unless they show significant accretion to the existing business. A star of the Bucket List which is about to be updated I can only see it staying in its regular position there."

https://www.malcysblog.com/2021/12/oil-price-scirocco-serica-and-finally/

Previous blog ;

https://www.malcysblog.com/2021/09/oil-price-iog-predator-petrotal-hurricane-serica-ujo-and-finally/

PS Flegg, with this RNS has missed yet another opportunity to fly the SQZ flag. Plus, what I would class as almost a news / information blackout on N Eigg, ie Why no RNS on rig being contracted before now, btw still no CoS, technical or partnering information either even though we have contracted a rig to drill in 6 months !

PPS Subdued market response so far today ... guess the info got leaked over the prior few sessions.

aimo & dyor

qq25,

Yep, using SQZ 2022 average production guidance, 30350boepd taking into account Opex (est £10boe) / hedging / Capex (est £50m) and using 140p/therm $74 Brent average for 2022 add in ~£200m for 2021 YE and indeed I too arrive at ~£744m (ex Tax / dividends / return of capital) CoH for YE 2022.

"My conservative figures put us on £730m net cash at end of 2022 ... That should value us at £1b minium by year end..."

If we are to be sat on £730m CoH by YE 2022 it would be a crime, both in terms of failure of our board to deploy cash in an accretive way and by the market attributing a piddly £270m to the whole company inc ~60m 2P's which on historic metrics alone would be worth £900m.

aimo & dyor

danielh, thank you for your considered opinion.

Sasa,

lol ......"embarrassment of riches".... love it.

I would have thought a half decent Ops update should see us top-out at ~249p before swiftly moving, as you suggested, into the 275p - 300p range. We then really need a driver to ensure we don't drop back to far on profit taking and give the market something else to consider, N Eigg alone will not cut the mustard.

atb

aimo & dyor

At those rates, would mean ~£100,000,000 (pre Opex) net to SQZ come 1/1/22 ..... PER MONTH !!!

Current MCap ~£600m

aimo & dyor

Woww ... Jan NBP now over $200boe. Clearly Putin's NS2 and Ukraine worries combined with winter demand and low reserves will continue to keep NBP elevated for some months to come.
Hope our Ops update, which can drop any day soon, with SQZ net production during September and October, averaging over 26,000boe/d from our BKR and Erskine add in Columbus and improved R3, I would be disappointed if we are below 31kboepd .

aimo & dyor

"Britain will phase out its 2G and 3G mobile networks by 2033 ...."

Great, just last week had my Smart meters replaced so they could be compatible, now looks like they will need to be done again ..... sigh .... Not So Smart !!

Roth1,

Nothing wrong with optimism, the world needs it more than ever. Your view is just a valid an outcome as mine and others, until that RNS lands it's all speculation. Another BKR style deal that potentially delivers ~800% SP increase over next 4 years without taking on debt or significantly increasing share capital would certainly draw in new investors. Never say never and there is always the halfway house of a merger too. ;-)

atb

Roth1,

"This company has too much to offer to fall to some low ball cheeky takeover.."

I would probably disagree with you on that on to some extent. It's been over 4 years since we have seen any form of M&A activity, not even a sniff from our board and what SQZ have left in the locker to offer and entice new investors and retain existing is next to nothing imo. N Eigg exp drill cash drain at some point in 2022 and probably not producing until 2025, assuming it's viable, other than that zilch (putting 1/1/22 aside for the time being).

Whereas, SQZ has significantly more to offer a PE outfit that values immediate revenue and a fabulous ROI.

For me, a t/o at +300p/s ( cheeky or not) is probably the best option for capital growth at this given point, otherwise we risk stagnating in our own cash while watching the world go by and issuing more LTIP.

PS Strange day once again yesterday with our SP under constant pressure from the off, driven even further down on US open against sea of blue backdrop and gains in both NBP and Brent on low volume of more buys than sells too. TICK-TOCK ... !!

aimo & dyor

Allalogie,

"Certainly not a sign of selling out to anyone anytime soon..."

On initial reading I would tend to agree with you, however closer examination of RNS and a few Google searches later, maybe the reason for appointment is not as it first appeared.

The 'glowing' RNS paints a picture of an extremely successful addition to SQZ board (that maybe so), whereas upon greater investigation, First Alpha Energy ( no longer a director), First Alpha Services and Talaria Technology are no more than I would class as DL's 'play things'. OMV's VP (Jul 2011 - Mar 2017) is probably one of a few relevant pieces of information imv.

Historic connection with BP's old boy's network was more likely influential as to why DL came onboard ..... the only quote of the RNS I picked out that may have some bearing given where we are atm is "was involved in numerous acquisitions..", we shall see !

As Dickupham has pointed out before, hope this is not another case of "noses and troughs" once more. Three board appointment in 3 months, really !!!!

All very much imo & dyor

Maverick,

"If I recall correctly, there ended up being an auction with successive counter bids..."

Wasn't that a threesome.

Was in COVE too, oh the good old days when markets were run by rogues not AI BoTs

Maverick, I honestly think there are / will be multiple PE backed suitors for us, just a matter of officially ensuring 100% BKR first before a deal is announced. As mentioned previously with the 28 days takeover code rule, that could mean as early as Monday. Would be surprised if so, but you never know. Our SP has 'gravitated' toward ~210p since late September for a reason, after the sudden rise in August ! Our VWMA(100 day) is still below that psychological 200p at 199.46p, as Rookie1 and I have mentioned, the 'framing' of an offer is an important factor , particularly in winning over the vote of less well informed.

If we get an approach, all well 'n' good, otherwise a move to a more realistic valuation ~280p/s needs to occur very soon, btw any opening offer at this point should begin with a '3'.

PS Anyone fancy a foursome !!

aimo & dyor

Wouldn't be at all surprised to see JPM with a Form 8.3 showing >5% at some point.

aimo

Probably the reason once again, like yesterday we were pull-down after 14:30.

To close flat on a day like today is pure manipulation imo.

aimo & dyor

Dickupham,

Did you catch my post (25 Nov 2021 16:10) in response to your earlier one, be interested to know your take on it.

atb

btw, I should of added, I would actually vote against a Share BB unless it was accompanied with announcement of a significant Special Dividend. Like Dickupham, I much prefer cash in my pocket than propping up our SP and making our EPS look good. Remember, SQZ is still an AIM stock and as such will get played as such by the market so do not make the assumption that a Share BB would improve our SP.

aimo & dyor

LC,

Be lovely to announce and execute a share buyback with passing of a special resolution but my guess is they probably can't atm, as I understand it, a Share BB can not be performed if SQZ know of material company information that's yet to be made public.... hummm. Whether or not that would stop SQZ announcing their intention is another matter. atb

PS Markets this morning are racing and virtually all blue ... yet we slip into the red, lol, they do like to play games ! Never mind, our time is near imo.

aimo & dyor