Member Info for NewKOTB

Bubble,

Thanks for that, much appreciated as the auto email notification about the meeting has yet to arrive in my InBox, strange as Investor Meet are usually on the ball.

I've just registered to attend ( 11am UK on 24 July 2024.), unfortunately it states :

"The ability to pre-submit questions has now closed. You may have the opportunity to submit questions whilst attending the live presentation..." Does make the Q&A a lot easier for Adonis & Co I guess !!

aimo & dyor

"Enquest as more undervalued than Serica due to Enquest's massive debt reduction, FCF, Tax losses.."

From what I can gather Serica have less debt, more available tax losses and higher FCF than Enquest.

aimo & dyor

Energean didn't sell significant assets recently just to drill Morocco with us, did they, just saying !

Pete, I do commend your tenacity in pumping this merger but do get your facts correct, "With cash assets in both companies at an all time high..", is certainly not the cash for SQZ, unless of course you include SQZ's >$1bn loan facility. Banging on about merging with Enquest or Waldorf or Touchstone or Arrow or anyone else you pull from thin air will not make it happen. Be good however to see your rationale in terms of being value accretive behind such thoughts, atb

Agree Dick, "begs the question why TF didn't SQZ do the deal instead.."

I'm amazed at this deal, must be something we are missing, otherwise it means SQZ are currently at fair value, wtf !

Only things I could point towards why we didn't get involved is that we are currently working on this elusive transformational deal or someone want us as we are without adding further M&A's complications into the equation.

Or, of course, SQZ (Mercuria) are not interested in adding value right at this moment.

aimo & dyor

Share shuffle ...

PF1962,

"We just have to hope that we can trust the BOD's intentions, and decisions..."

Agree, although trust has to be earned, atm our BoD have negative value attributed to their account.

aimo & dyor

We are being systematically managed for one purpose only .......

Answers on a postcard to :

62 Buckingham Gate, London, SW1E 6AJ.

aimo & dyor

Simplistically, T/O commonly use VWMA plus a premium of circa 30%, our VWMA(100) currently stands at ~173p/s, plus the premium would equate to ~224p/s. Of course come Q4 our VWMA will most probably be significantly lower, so fingers in the air but that aside given our reserves, CoH plus significant FCF, I don't think >200p/s would be out of the question, or so it shouldn't be !

I would however much prefer to see us do a HBR style transformational deal and let the SP take care of itself and regain its glory years once more !

aimo & dyor

Persistent Pressure on our SP, day after day, week after week, month after month could they be looking for sub 120p I wonder !

With ~130mmboe 2P's and ~£200m cash atm, even allowing for lowly $8boe for reserves, t/o has to be easily >200p/s, does it not ! Mercuria would only need to put up ~£500m for the lot, including $2.3bn of tax losses with payback well before the end of current parliament. Autumn budget together with Mercuria lockup ending in Sept will be key in determining our direction imo.

aimo & dyor

Raxfactor,

There is nothing more I would like to see than SQZ playout their true value and develop in a multinational player, although I fear we may never get to see that happen. As Mommur stated, dividend is excellent and likely to stay so, why not collect it and ride out the next 5 years EPL.

Also, FangKat and others, please, please do not base any investment decisions on mine or for that matter others posts. I post my POV as I see it, that's all it is, my POV and of course, all in my opinion.

aimo & dyor

Compare our SP today to that of 5 years ago when we at ~130p. That was almost 12 months on from our BKR acquisition transformational RNS announcement when we moved to ~23kboepd net production and paid BP pre-tax net cash flow revenue from the BKR assets of a massive 60%, leaving us with just 40% net revenue.

We now have circa x2 net production, full 100% revenue from BKR (as good as, with Rhum at 50% ) and x2.5 reserves, 50/50 split gas/oil, multi production hubs, interest in other satellite fields, cash and equivalents of ~$380m vs $50m (2018), ~$2.3bn tax losses vs ~$150m (2018) this is the damage sentiment and EPL around NS O&G has impacted us, unbelievable but fact, hence why I see Mercuria as a direct threat atm. OK share capital increased but not significantly from ~265m to ~394m, but even taking that into consideration, SQZ are certainly a bargain right now. Mercuria have already bagged ~25% of SQZ, what would they be willing to pay for the remaining 75% ??

aimo & dyor

June 2021, not exactly 5 years low is it, yes we were at this price back in Nov 2018 though !

Raxfactor,

"I take your point but what about the 75% of other shareholders are they just blindly accepting what Mercuria have in mind?.."

Don't be fooled by the % of votes required to pass a t/o resolution. Voting apathy and simply those that are not aware of the resolution always plays a massive part in these cases. Critically, it's the number of votes cast as % of those on the day that counts NOT of the full share capital in issue, massive difference as such with ~25% of share capital already under the control of Mercuria, the threshold needed to pass is relatively easy with the likes of Blackrock et al backing them. Recently DARK (Darktrace) voted on a t/o by PE, got passed with only ~65% of share capital voting (~68% in the case of our Tailwind Trojan Horse T/O), so understand what a strong position Mercuria are in with their ~25% thanks to Mitch 'n' Co. Getting sufficient votes to pass a t/o resolution would be a 'done' deal' should Mercuria wish it to be so. Mercuria lockup ends 21/9/24, after which that's when we will see if SQZ's Red Riding Hood mgt at the time invited Mr Wolf to our dinner table.

aimo & dyor

Morning Mommur,

"I'm in the camp, that Mercuria is more than satisfied with its dividend on its 96,618,142 shareholding for the next few years rather than an opportunistic t/o..."

I have to ask myself, why would Mercuria be "satisfied" with ~26% share of the dividend when they could have 100%. Mercuria wanted a massive slice of SQZ for a reason and for sure it wasn't for the dividend imo. SQZ offered Mercuria access to a fully kitted out upstream O&G company with experience and support staff on a totally different level to TW that's able to absorb future challenges into its organisation. Mercuria via its trading arm would 'provide' hedging at poor rates to lessen UK payable tax and move said trading profits to their trading arm probably packaged part of further RBL from themselves too. As mentioned, our current tax losses (~$2.3bn (nb. correction from last post)) would go a considerable way towards paying for the t/o of ourselves over time. We know that Mercuria sucked cash from TW like there was no tomorrow, hence why their predatory nature imo would not be happy with a tiny ~£23m pa dividend. All of SQZ old guard have 'moved on' with big hitters from Mercuira already on the board so any concept that this is still SQZ of old, is history, question is who will benefit from the soon to be reborn SQZ !

aimo & dyor

SQZ are already sitting on a "mountain of tax losses" circa ~$1.3bn, we don't need any more, we need instantly accretive acquisition in a stable tax regime with lower overall effective tax rate, surely that's not asking for much, is it !

aimo & dyor

Back in May 23 SQZ issued an LTIP RNS for Mitch Flegg CEO and Andy Bell CFO nil-cost option worth between them ~£2.4m stating, in order to be vested our SP needs to be 500p or above for a period of 180 days, at the time I remember think woww, that would be some achievement from current SP ~220p. So was it just a stunt as I and others speculated at the time to support our failing SP or did they really think it was achievable. Well just over 12 months on and not only have both Mitch and Andy long since gone, but for me also any chance of ever seeing 500p.

That said, may be new LTIP for same performance target for our new CEO / CFO could be issued, so long as SQZ have a real plan to move the company forward once again, after all nothing has changed so the original LTIP's must still be achievable, would they not !!

aimo & dyor

Raxfactor,

You have missed my point, this is specific to SQZ in terms of our major shareholder, Mercuria and imo, they have positioned themselves for t/o of SQZ right from the off. The fact that circumstances (WFT/EPL etc) have fallen in their favour is an added bonus worth £100m's to them. The only way I would be wrong is for SQZ to complete a HBR style deal and hence put SQZ on a different path with significant boost to our SP. Without any meaningful M&A deal SQZ will be open to Mercuira's predatory nature. Too many synergies for Mercuira for them NOT to be interested in SQZ afaic, just a question of at what price !

It's in Mercuria's interest for us to remain in the status quo as far as meaningful M&A's deal go. Transformational deals can be done AFTER any t/o should they wish, or just keep milking cash either way, SQZ is a bargain for them right now. As we all know, SQZ's tax losses will in themselves go a considerable way in paying for any deal over time.

As for me hanging around, wish I hadn't tbh although I've reduced my holdings significantly.

aimo & dyor

Wouldn't Put It Past Mercuria to have a third-party (nudge, nudge, wink, wink) supressing our SP in preparation for t/o. SQZ is an absolute bargain for the long-term hold with the amount of cash she will be throwing off.

With WFT/EPL and now Labour in charge things could not have fallen any easier into Mercuria's lap.

My prediction by December SQZ will be in the hands of Mercuria.

aimo & dyor

Lets see what “lunatic leftie” and “red Ed” have to say for themselves this week and maybe you will become one of the converted too.

atb

aimo & dyor