Member Info for NormaStits

If only zebbo, if only...I love your optimism and pragmatic approach.

Come on Flabby. Let everything settle down and the froth come out of recent news. Fundamental cash generation will see this recover in time. Hold on, hang in there…

Maybe worth another listen...The Street will know all of this, but a bit of smoke and mirror always possible with stated Profit!

https://www.youtube.com/watch?v=k06aTF-0VpE&t=307s

Cannot wrap my head around this. Probably my ignorance but don’t get it. This outcome would fail the political sniff-test which is what has prompted this whole thing in the first place?

boardguy - exactly what i am expecting. A combination of all 3 seems likely given the rate of cash accumulation. The 'deal' aspect is probably the toughest call for the BoD and the volume behind having to act on the other options will become deafening before too long, all other things being equal.

I expect there will be some sort of special divi at some point given the rate of cash accrual. Be a nice bonus when it comes but we can simply hand it over to our utility suppliers to pay the household bills when winter comes.

Agreed… strong FCF yield is a huge positive as long as the free cash is used to drive more value. When it sits in the bank, it ultimately becomes dilutive. The cash belongs to the shareholders and they invest in anticipation of return. If shareholders want to hold cash, they can do it in their own savings accounts. So the BoD should be driven to find ways to deploy the cash in additive ways or hand it back. My view is that the BoD is aware of this and is looking for ways to deploy it. They will know the clock is ticking but won’t (hopefully) allocate it poorly.

I expect a combination of returning it to s/h (buyback + divis) and investment in producing assets. Mitch is clear that they will only pursue opportunities to which they feel Serica can add value. I’m ok with that.

…in which case use the current price to buy more?!

Nobody was expecting 7p surely?

Would be nice, but I’m not convinced it will. Hopefully I’m wrong.

If the seller wants to continue reducing exposure, perhaps we have an ongoing stock overhang that will suppress the share price for a while? If the fundamentals continue to progress well in the background, it may prove to be a great buying opportunity.

Have just added Flabby. At 10x the price I paid many years ago...am either mad or lucky to do so.

Hold on Flabby, no drama here. Maybe not for you, but a chance for others to add. The FCF is a compelling underpin to market cap; markets are more inclined to risk-off just now, and the strongest performers bear the brunt. It should pass.

Moving nicely on TSX.

Price based on secondary placing clearing price. If 5% of the company is mopped up so quickly at that price, it’s a good buying opportunity. Your post suggests you shouldn’t own shares in anything if you don’t understand the mechanics…

£48K?! Good on you sport - I suspect with their dividend policy they will want to give you that every year plus an incremental increase, just to keep compounding it. Lovely stuff. Enjoy it and I will send over my Paypal deats in case you cannot spend it all ;-)

W T F are you on about?

So cash & deposits are rising at c£1m per day so far this year, up until 20th April. Hedging provisions are separate from this figure. That is pretty amazing if true.

A reminder below of Mitch's comments from the Interims. The provisions for hedging will be grim, but if the marginal output gains from the past 6 months (BKR cashflow and increased production) have been left to run, the underlyings will be strong. I hope.

The market teaches us to expect the unexpected, so, per NewKOTB guidance, I have a little dry powder to deploy in case it gets all silly in the playground. With a book cost of 30p per share, paying >£3 for extras would feel odd, but I suspect this one has some further runway

This year the unprecedented and continuing surge in gas prices has required significant accounting provisions based upon future-period hedge valuations. This is reflected in our first half reported profit which is net of a £30.3 million non-cash hedge provision against £3.3 million in the prior year first half. It is important to recognise that this provision will only be realised if gas prices continue to maintain their current very high levels but in those circumstances the Company will be benefitting enormously from the high prices as around 80% of the Company’s projected oil and gas production is
unhedged. In view of the extraordinary scale of gas price volatility seen over the past eighteen months, with unprecedented lows quickly followed by unprecedented highs, we believe it important to maintain a prudent price hedging programme within sensible cost constraints whilst retaining material upside exposure.

I’m not sure North Eigg is baked in? That would provide a future growth leg…