RE: Loads a cash ....5 Jun 2019 20:22
Our friend has been busy on BIDS board today, full throttle on de-ramping.... and only pops in here to repeat same old rubbish day in day out and fails constantly to acknowledge the facts pertaining to SQZ robust financial status. No mention of the 8.3% rise in gas prices yesterday, conveniently ignored !!
Our balance sheet shows net assets of $117m with know Financial liabilities due to the deferred structure of the BKR deal, to be paid from receivables leaving a net positive cash flow over the NEXT 3 YEARS. Note, the payment is from receivables so no risk at all is attached to the deal in real terms. Please remember we have no debt, no bondholders and no real CapEx for 2019. So we only need to buy tea and biscuits for the boardroom.
BKR Deal Structured to mitigate financial risk:
o Bulk of consideration deferred and contingent (ie our liabilities)
o Future payments linked to the performance of the BKR Assets, allowing both parties to share the benefits of improving field recoveries and production efficiencies
o The BKR Assets are predominantly gas assets. Gas sales arrangements include price hedging to further mitigate risk
Not to mention that we could end up with all our BKR liabilities reduced to zero. If by some small chance gas prices continue to fall, BP will PAY SQZ !!!!! That's how good a deal BKR really is ......
Extract from BKR deal document:
"No amounts are payable by Serica UK unless this cash flow is positive and amounts are repayable to Serica UK in the event of negative cash flow, up to the amount of prior payments made to BP in the same year."
NI you really are making mountain out of a molehill here, but don't let facts stop you.
For details on this please see p99 point 22
https://www.serica-energy.com/downloads/reports/2018-16-April-FINAL-ANNUAL-REPORT-AND-ACCOUNTS.pdf
Have a good evening all.
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