Member Info for NoQuestionMarks

Sekforde,

Your post seemed to implyth at Serica have been cancelling the shares they have bought back?

They didn't. The shares bought back are held in treasury.

It is also worth remembering that if they did buy back and cancel shares the percentage ownership of the comapny by Mercuria would increase.

aimo

The final decision to be taken at the end of August.

Q4 2024 remains the target for stratup, but Q2 2025 looking more likely reading between the lines of todays Var report

imho.

"Balder X

The Jotun FPSO is a key enabler to continue to deliver future value in the Balder Area. The project unlocks gross production of 80 kboepd and with low operating costs of around 5 dollars per barrel. Actions taken to increase the pace of the remaining construction and commissioning has yielded results, and the FPSO is nearing completion. The mooring system has been re-designed to reduce potential weather constraints for installation. This allows for installation into September and earlier than anticipated in 2025, should sail away be postponed to 2025. Start-up in the fourth quarter of 2024 remains the target and a decision on installation this year will be made at the end of August. The Company’s key consideration is to ensure work is not carried over into the offshore hook-up phase. In the scenario where installation slips to next year, the expected start-up is by end of second quarter in 2025. Flexibility has been added to the FPSO installation arrangements, giving optionality on the timing of installation. Other elements of the project are largely complete. All subsea facilities are installed. All 14 production wells have been drilled and successfully completed. The final water injector well is ongoing with expected completion in July. If first oil moves to 2025 it will have limited impact on the Company’s 2024 production and as the project is nearing completion, this is principally a schedule issue, and does not have a material impact on guided costs. Completion of the Balder project is in sight and all the Company’s efforts are focused on achieving first oil as soon as possible in a safe manner and with a high level of quality. An update on the project will be communicated towards the

end of August when a decision is made on the timing of installation of the FPSO. The Jotun FPSO unlocks future growth opportunities. The Balder Phase V project is being progressed, involving the drilling of six production wells to utilise the remaining subsea template well slots to capture gross 2P reserves of over 30 million barrels. The drilling of these wells will commence in the first half of 2025 and be completed in 2026. Balder Phase VI is being assessed, to add new subsea facilities and wells."

We got a mention in the directors deals section of the FT yesterday.

The piece said we were in the top 10 additions to Fidelity ISAs in June.

The piece also quoted Chris Wheaton from Stiefel on Serica "We see the market as more than discounting the impact of windfall taxes, with c.95 per cent of the current market cap generated in free cash flow across 2024-26 at our $70 a barrel oil price forecast"

Redwineday,

The assets are a play on volatility and a possible future site for hydrogen storage. We know the assets made a pre tax profit of £32.3m in 2022/23 but as we know that year was truly exceptional.

There are currently only 8 geological sites in the UK. Five salt caverns, two depleted gas fields and one depleted oil field. These sites historically have made their money injecting gas into storage when demand is low (typically summer) and withdrawing gas when demand is high (typically winter). However, with the all year around availability of LNG those summer/winter price differentials have narrowed. Consequently there is little appetite for companies to bring new facilities online, hence Totals decision to sell to us for what seems a very good price.

Our site is fast cycling which as it implies, means we can withdraw gas and inject gas far quicker than the larger long range storage sites.

How much can we make?

It all depends on how good we are at responding to markets signals, buying low and selling high.

It also depends on how volatile prices are, more volatility is better for us.

In a world where Labour seem to be intent on driving the UKCS into an accelerated decline, volatility may be expected.

I hope the assets can tick over, not losing money in a benign environment and then making big profits in the periods of volatility.

Just to give you an idea how volatile it can get..... In Jan 2023 on some days as little as 5 mcm's were withdrawn and on other days over 40 mcm's were withdrawn. On the 17th of January 2023 70.2 mcm's were withdrawn, the highest for 18 months.

A speculative buy of a relatively new asset by AA which should do well in my humble opinion.

aimo

NKOTB,

I presume he is referring to the hedges in the full year results that were accurate up to the 18th of April, recently implemented as we have just entered Q3, but I could be wrong of course.

In Q3, 7k bopd of oil (3k puts, 2k swaps, 2k collars) and 100,000 therms per day at 71p.

All pricing details through to Q1 2026 are in the table under 'hedging' in the 'Cash balances and future commitments' section.

It's worth remembering that when we draw over 50% of the RBL, which we presumably will with any material acquisition, we have to hedge 50% of forecast production in year one and 30% in year two from the borrowing base assets.

Also worth remembering the Rhum does not a part of the borrowing base assets.

Any money drawn from the RBL has interest currently at 9.23% (SOFR + 3.9%)

A financial straight jacket... Acquisition needs to hit the ground running.

aimo.

Don't rely on Google!

The 15,000boepd figure was for the whole group, Norway UK and Netherlands.

Check out the latest kistos presentation.

We are looking at a max of 8000boepd, more like 5000boepd after the initial spike.

aimo

Too many variables for me guru.

However, the barrels will be high margin, that we do know.

The operator estimates opex per barrel at $5.

Norwegian average is $6 compared with $21 in the UK.

Prax picked up Hurricane for peanuts and have struck a deal with Total at the bottom of the cycle, presumably on good terms from their perspective Now we have a way forward with a new operator, who you would assume, see value in the assets.

Prax, Viaro and Ineos all have deep pockets, IF Labour play the game and allow them to make a decent profit.

The Prax statement.

https://www.prax.com/the-prax-group-signs-an-agreement-to-acquire-totalenergies-upstream-assets-in-the-west-of-shetland/

I would say no to higher dividends.

The dividend at 23p per year is already extremely generous and costs the company £90m per year.

This year we have approximately £200m of capex to shell out, last year it was only £79m.

So, £90m on dividends and heaven knows how much in tax once Ed and Rach get to work on the abacus!

We need to preserve a healthy balance sheet until we know for sure what labour means for us.

aimo

April production came in at 9.5k barrels per day, up from 8.9k in March.

Breakdown.

Norway gross production 28.3k b/d of oil.

10% net to us 2830b/d.

Netherlands.

Netherlands gross production 4890boepd of gas.

60% net to us 2934boepd.

GLA

UK gross production 1001b/d of oil and 17511boepd of gas.

20% net to us 200b/d of oil and 3502boepd of gas.

aimo

From the AGM presentation.

Estimated tax losses as of the end of 2023 (including unclaimed capital allowances for RFCT and SC)

Ring fence corporation tax £920m

Supplementary charge £780m

EPL £120m

Will we ever realise them once Labour get their feet under the table?

An handy explanation of the taxation system from the NSTA.

https://www.nstauthority.co.uk/regulatory-information/exploration-and-production/taxation/#:~:text=Energy%20Profits%20Levy%20(EPL)&text=The%20rate%20is%2035%25%20having,prior%20to%201%20January%202023).

The most galling thing about the TW deal is that pretty much every poster on this forum saw it coming.... And still Dave Latin tries to justify it.

Triton is already beyond its design life, the life extension assessment estimated that she was good until 2030.

That isn't too far away.

Refactor,

There are two compressors on Triton, one is out of action until October when repairs will hopefully return it to twocompressor operations. I'm guessing it's a 'biggie' as the repairs would have been scheduled in to the 40 day shutdown commencing 1st July.

Not good.

Sadly Labour, and to a lesser extent, the conservatives, don't do 'common sense'

aimo

It is worth remembering that only a third of our production comes from the UK, thankfully.

The companies decision to move into Norway 18 months ago looks better by the day.

By the end of August I hope the Jotun FPSO completion and first oil date is confirmed. Once we know when production will start I would then expect firm decisions on Orion and M10/11 to be made.

aimo

David Whitehouse, CEO Offshore Energies UK comments:

“Wealth creation is at the core of the Labour party’s manifesto and we believe the fastest path to that economic growth is by choosing a homegrown energy transition.

“While we share Labour’s ambition to make the UK a green energy superpower, the path to success is building on our existing industrial strengths and our 200,000 skilled people.

“An affordable net zero needs both renewables and our homegrown oil and gas sector. Ramping up more carbon intensive imports from abroad will not bring down energy bills for consumers or attract the investment and skills we need to decarbonise our economy.

“We’re concerned by proposals to end new oil and gas licences in UK waters. We are explaining to all parties that we need the churn of new licences for a successful homegrown energy transition, to safeguard jobs and our energy security and create the investment conditions firms need to stay here in the UK.

“We also need a globally competitive tax framework based on fair returns; windfall taxes undermine this. Labour has big ambitions and we need an investment environment to match.

“Labour’s manifesto carries many important proposals for our sector. We are ready to work to deliver a positive future for everyone in the UK. One where we reach net zero, grow the economy and support jobs and communities.”

https://oeuk.org.uk/oeuk-responds-to-labour-party-manifesto/

On a dreadful day, I though we could do with a little lift.

It is little known that the ESIM was re-calculated on the 1st of April 2024. Policy paper reads "These thresholds will be adjusted from 1 April 2024, and annually thereafter, by the preceding December Consumer Prices Index figure."

CPI in December was 4.0% so the new thresholds should be $74.26 per barrel for oil and 56.16p/therm for NG.

Not exactly a Woohoo moment and Labour could and possibly will amend the legislation if oil and gas prices trend downwards.

It is a glimmer of gold in a heap of poop, probably just the wrapper from a Caramac, but it's there all the same.

Hi NKOTB,

I missed it a the time but the 25% interest in Columbus should be transferring from Waldorf to Capricorn Energy any time now. Completion was expected in Q2, backdated to 1st of January. It was part of their settlement for the earn out consideration related to the acquisition of Catcher and Kraken

$7m mentioned as a cash payment alternative if the licence transfer didn't go through within nine months.

https://www.capricornenergy.com/news-media/news/2023/uk-north-sea-contingent-payment-update/#Tabundefined=1

1. From what I can gather, Labour dropped their plan to backdate the EPL to 2022 in February of this year. They could bring it back I suppose but you can't tax retrospectively, not unless you are a tinpot dictator...

2. EPL extended to end of next parliament... and maybe into the next if they win again.

3. The closing loopholes one is ambiguous. Do they mean the investment allowance or do they mean both investment and capital allowances... nobody seems sure.

Wood Mackenzie did a decent piece back in February.

https://www.woodmac.com/press-releases/labour-north-sea/

aimo

I agree, it's getting silly.

Net asset value at 31st Dec 2023 stood at £655m, and we are currently valued at around £635m.

As others have said, All North Sea operators need to unite, issue a final warning before beginning to scale back production as 'closed loopholes' and 78% tax just ain't worth working for.

It is a sorry state of affairs that only job losses will get the electorates attention.

We are advertising for an Ops Manager at our gas storage facility in Cheshire.

https://www.simplyhired.co.uk/search?q=kistos&l=warmingham%2C+cheshire