The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
For whatever reason, the oil and gas sector is not the flavour of the month. Like most sectors, it is a cyclical thing.
A similar example would be Parkmead who are currently mainly gas, although are intending eventually to move towards "greener" power. They are run by the major shareholder Tom Cross, who built up Dana Petroleum and famously sold in a tremendous deal to the Koreans. PMG incidentally will be the operator in a joint licence that we were awarded in the NS a couple of years ago. They too are producing profitably and Cross has a good reputation for building a company.
In the last two years or so since our SP was at it's peak, we have dipped approx a third. during that same period, PMG have dipped two thirds. To me that indicates that SQZ isn't viewed as negatively as some appear to believe. The cyclical wheel will eventually turn up for all oilies and I believe that we are better placed than most. Just check the drops of the majors and you can get an idea of the climate.
As always, patience is a virtue even though it is aggravating.
Fireworks should be totally banned prior to bonfire night. They are already being set off around here. Can't understand people who celebrate occasions before the due date. Some were set off last night locally and they upset my dog so much that he went beserk dashing around the room, crashed into my Christmas tree and tore down all the Xmas decorations. Sorry, I'll get my coat!!!!
Paddy, dare I ask, do you ever get any spare time? Your research is absolutely outstanding and the fact that you so willingly share with others is all the evidence needed to show what a great guy you are. I'm sure that I speak for the vast majority when I say that you deserve our heartfelt thanks.
Hi upomega, without checking back, I seem to recall a figure mentioned of £11million for Rhum3. If I'm correct, I would guess that is just our share of the cost. Colombus drill, again from memory, is covered from our farm out agreements. Hopefully if I'm incorrect, someone will correct me. I am confident also that the piggy bank coffers are also being topped up.
Stay safe and have a good weekend.
Adz2020, no problem, I am confident with GGP and have held some since during the Xcite days but added many more over the last four years or so. This hopefully will be a game changer for me and has already recouped my XEL losses.I do hold a couple of other shares which are doing relatively well.
Have a good weekend and stay safe.
Adz2020, there are many ex Xcite holders around, it's just that most don't admit it or like to be reminded of either that period, and have nightmares recalling the BOD, lead by that bandit Rupert guy. I did lose an awful lot on that one and wish that I'd followed their example and sold around the £4 mark. A lesson learnt!!!!
Hi upomega, I can only speak from my own personal point of view and say that I have full faith in a successful outcome. As dexter points out, there may be some delay if things don't go exactly as foreseen, but I invest here in SQZ on the strength of the team as much as the assets. We have a chairman and ceo who between them have many, many tens of years of successful experience in the NS. They don't tend to make statements or commit to anything without having done their homework first. On the strength of that I do sleep easily as far as this company is concerned.
Atay safe.
Hi dexter, I do understand what you are saying and you have obviously expierenced the North Sea fields. I am just making my personal inexpierenced view. ASs such I have to rely on the expierence of both SQZ and Awilco.
Rhum is a gas field with a small proportion of condensate, I don't know whether that would make any difference to any unblocking that may be required. We are aware that certain "equipment" was broken down there but I expect that the time spent by both companies studying that will have resolved the operation that was necessary.
As for weather holdups, having been investing in oilies in the NS for over 30 years, I do understand that heavy weather can delay things but am assuming that the initial work has now been completed even allowing for a week or two delay in starting the operation from the initial planned date. I was invested in a heavy oil well in the NS which introduced heating wires into the pipeline to help with flow, could something along those line be possible to ease the problem if it was as you envisaged.
I do understand why you may be doubtful of the estimated 70 day period.
However I'm not sure how recent your experience is, but personally I am prepared to accept that time allocation as SQZ did spend literally months and months studying all the data that BP passed over to them. Awilco have an excellent reputation and appear to be experts in this type of re-entry.
Our BOD do tend to be quite conservative with their predictions and prefer to under promise and later report better results.
We are all allowed our views and with this company I now have a "half full" viewpoint. Time will tell whether we have problems or not.
Stay safe.
Hi Dexter, hopefully you may be pleasantly surprised as to how soon Rhum3 is completed.On May the 12th., Awilco issued a press statement as follows:-
With reference to our press release of 25 February 2020, Awilco Drilling PLC is pleased to confirm that a contract has been signed with Serica Energy (UK) Limited for the provision of WilPhoenix for a one well workover on the Rhum field. The contract has an estimated duration of 70 days including preparatory works and will commence around 15 September 2020. WilPhoenix is expected to be available for future work from early December 2020.
WilPhoenix is one of Awilco Drilling’s two Enhanced Pacesetter semi-submersibles and is equipped for drilling in water depths up to 1,200 ft. Awilco Drilling also has two new build rigs on order of Moss CS60 ECO MW design equipped for drilling in harsh environments, and independent options for additional two rigs of the same design. The recent RNS doesn't state how long the rig has been anchored on station and it is possible that the preliminary work was carried out prior to that, but even working out the 70 days from the RNS would give completion prior to Christmas, and we are aware that it is already linked to the Bruce rig. So fingers crossed for production to start prior to yerar end and allow Awilco to move onto their next job.
https://www.globenewswire.com/news-release/2020/05/12/2031629/0/en/Awilco-Drilling-PLC-Contract-signed-for-WilPhoenix.html
https://www.oedigital.com/news/478391-serica-hires-wilphoenix-offshore-rig-for-rhum-well
BP are now fully aware of the advantage of how efficient SQZ are as the all in cost of production on the BKR fields have almost halved from the days when BP operated those fields. So as you say, by doing a similar type of deal BP get the sale price plus a large boost in the profit on their share of production. Again as you say, a true win win for each party, and more importantly from a selfish viewpoint, for us long term loyal shareholders.
Hi upomega, I think that I can partly understand your view but whilst you intimate that SQZ are 40% down from their highs, I think that you must agree that all oil/gas shares are well down, many by far more than that. BP, who you seem to prefer, are down from around 600p to today's 218p over the same period. They have had to lower their dividend whilst SQZ have initiated one. BP have announced a huge loss and are having to conduct a fire sale of licences in order to reduce their debt, whilst we are profit making and looking to make aquisitions. We are aware of the length of time it takes to tie a deal up from the BKR deal period and I personally expect our BOD to conduct due diligence thoroughly prior to signing on the dotted line.
We obviously have different perspectives on SQZ and we all are free to do our own research and place our money with the company that we each believe to have the best potential.
I am aware that some believe that we may be a takeover target, however I fail to see why anyone would currently want to get into a long term aggressive takeover fight for a company when there are so many major oilies wanting to sell their licences in what must be termed fire sales.
You pay your money and take your choice, good luck with whatever you decide.
Hi chinch, I second your thoughts. The trigger points that you raise are all positive potential movers and when you consider that it is only around five years ago that one could pick up these shares for around 5p, I struggle to see why investor some investors are so impatient.
SQZ have always had a very set view on how to increase investor value and the recent fall is just part of the journey that we are on.
Twitter accounts, certainly from my point of view, are just a method employed by many to hype shares that don't necessarily have a solid base. As a company that has so much near term known positive news due, as per your post, and no debt, we don't fall into that category.
For me, I much prefer our BOD to be spending their time attempting to tie up deals and running our company efficiently, than using their time posting "Trump" style notices.
Investors who are unhappy with the way the company is run have the option of clicking on the sell button and re-investing with a company that suits their view.
PADDY please continue with your posts and say whatever it is that you wish to divulge. Anyone who has bought purely on your postings without doing much more of their own research must be naive. Your posts, particularly the sat. ones are certainly a help but that helps to build a fuller picture.
I have been in GGP many more years than you and have added along the way, both before and after your investment. I believe that your helpful posts have helped to attract many more helpful and well informed posters.
Today is a particularly bad day as far as the SP is concerned, but with buys outstripping sells for the last few days and the basics of GGP only getting better, paper losses are irrelevant, the story here is only just beginning to unfold. Keep the faith
Johnycash, your post reminds me of a text I received from my father. It said "Congratulations son, I hope that you remember today as the happiest in your life" I replied "Thanks Dad, but I don't get married until tomorrow". He replied "I know!" OK I'll get my coat
Hi Maverick, there is mention in the presentation that they are looking for aquisitions. I know that it is the standard phrase, but I feel sure that they are active on this front, especially with the cash pile and increasing income in these difficult times.
The interims will be declared at 11am on Thursday the 10th.
Pretty sure that we all have a good idea just how positive the figures will be. More interestingly will be the forward looking statement and hopefully news of a deal. Even if the latter doesn't surface, the re-entry into Rhum3 and next years Colombus, possibly news on the Eigg licence.
Stay safe.