Member Info for sasa43

Hi chinch - understand your reticence about the BoD ever 'changing their spots' but not doing so (changing tack) will likely cost them and us a realistic valuation of the company and usually survival's a great motivator, as I said the other day.

If they can't rise to the occasion now, then any buyer deserves to acquire the business BUT at a compelling price, not with it 'going for a song' using most of our cash to do it, as AA intends.

As for your 'straw poll', any decent offer should start with a '5' in front of it, imv, i.e based on a prospective p/e of 6, according to my eps guesstimate for 2022, but that's just my take, of course, so please DYOR etc., - sasa.

Hi chinch - valid concerns in this delicate situation right now which are understandable; if AA chooses to walk away, then a temporary setback in the sp is almost inevitable , maybe into the 275p - 300p range, I'd guess.

However, it's almost invariably better to get out of a bad / opportunistic deal like this one which precludes offering shareholders a realistic value of what Serica's worth currently and revert to the fundamentals which in this year, especially, are hugely beneficial for us, imv.

The most positive aspect from AA's approach is to really shake up our BoD in adopting a more pragmatic policy in getting the sp up to nearer to our true worth, rather than simply relying on the unexpected blessing of escalating gas prices which probably won't last for too long.

Things like employing their cash hoard proactively by several options open to them, as discussed, ad nauseam on here, moving onto the main mkt as an advantage (not a silly 'IHT loss' reason not to do so) and thereby gain genuine Institutional interest in us, seeking acquisitions / 'farm ins' to maintain momentum, etc., ergo, do most of what AA is doing as it works but not at our expense, imv...

Personally, I think this event should have really shaken ACW / MF out of their relaxed management style and, although they've done very well post the BKR deal for Serica's re-rating, I hope that they will adopt a more dynamic 'modus operandi' henceforth.

They need to benefit all the shareholders from here, if they're genuinely concerned about going forward - sasa.

Top post, NewK - echo the opening view, especially - sasa.

Shrewd / expedient move that to keep the locals onside as the mine build gets underway... sasa.

'Morning NewK,
My reply to boardguy just now on the effect of paying out a significant 'special divd' illustrates my views on it, fwiw.

Additionally, it will almost certainly prompt Kistos to reduce their bid terms accordingly to the extent of it or they might choose to ignore it to effectively raise the value of their offer in our hands if they formalise the bid, although highly unlikely, as they could ill afford to see a hefty reduction in the cash they're seeking to get hold of...

Re: your second para regarding them acquiring KIST (cynical but true, I'd say) seems the only plausible reason for them to do so but it would be a false hope on their part; AA would surely clear out most of them as soon as he moved in - sasa.

Yes, of course, boardguy, the sp would fall in XD condition to the extent of the payout but given the bumper year Serica is enjoying with energy prices so high currently (as winter approaches, too) that should see the sp pick up again as the Y/E approaches, notwithstanding the Nth Eigg drilling outcome due in October.

The whole point of defending the company from being bought too cheaply must now be uppermost in ACW's / MF's mind - if it is to happen, though, let a fair price be paid for it rather than what's loosely on the table at a significant discount right now - sasa.

"Or we announce a hefty 'special divd' or capital repayment to stymie Kistos from using much of our cash to buy Serica on the cheap - think you forgot that one, NewK...

Can't see that Serica ever had / has any real interest in acquiring Kistos, other than their hurried counter - tactic to it - certainly agree, though, that the Hardy's decision will be crucial to determining the outcome here - sasa.

Echo that, NewK - Serica's best form of defence is attack, as the saying goes and it needs something major right now to thwart their predator - sasa.

Well, they jolly well should be, Jimmy, quite agree (subject to the 'imminent' CPR ) - Char has their huge gas discoveries, conveniently on the EU 'doorstep' / other 'green' interests to develop but needs the cash to monetise them.

Serica has a lot of spare cash to utilise and states that it's looking to acquire attractive prospects outside the UK Nth Sea nowadays, too, given it otherwise risks being bought by KIST, as NewK says, if it doesn't proactively use it - the need to survive is a very strong motivator!

Seems a 'win / win' for both companies to me, so do hope Serica's now 'on the case' - sasa.

Good post there, Steepljack - my sentiments entirely vis a vis the macro environment we're in currently, fwiw...

For now, it's best to stick with the miners of PMs / crucial industrial metal producers and avoid those with a retail interface, imv. Much relief that Horizonte secured its finance when it did.

Personally, I doubt the Fed's resolve to curtail inflation significantly (threats cost nothing, politically) and a 'reasonable' level of monetary erosion is required to devalue govt. debt, anyway, as you say and avoid a recession, never mind the dreaded 'D' word of the 30's...

Once the mkts take this on board, the US$ will decline again to lift the likes of nickel / copper stocks, so it's just patience that's required for now - sasa.

Hi RELLIM - Echo that - we're clearly on the same page here...

Have a good / cool w/e, too - sasa.

Hi upomega - me a 'turncoat'? How so?

You thought that about NewK, too, recently - sorry but I (and we, I dare say) don't get it - sasa.

Hi NewK - Yep, sorry, you're right about the 10% 'buy back' limit (dunno where I got the £200m from!) so the eps 'benefit' to the shareholders would be accordingly reduced - ergo, even less appealing.
Not sure either, come to think of it, whether a rejected offer, where both of 'em stand right now, compromises that flexibility; will try and find out - sasa.

OM1984 - I do wish you'd get off this vulgar metaphor you keep using; it's unpleasant on a public forum and merely debases your persona accordingly - sasa.

Hi RELLIM - entirely agree with the expedient 'special divd' tactic to invoke forthwith, as discussed on here...

The other immediately defensive alternative would be to announce the recently granted 'share buy back' option being employed - 'if need be' they said at the time (funny that is was sought only a few weeks ago; we now know why, I guess) and that, I suspect, is what they'll do.

It's nowhere near as effective as the 'special divd' declaration would be for the reasons we've already discussed - from memory, I think they now have the authority to buy back up to £200m worth if they choose to do so which would boost the eps by 22% at today's sp level - only a modest, indirect, benefit to the shareholders but a defensive tactic, nevertheless - sasa.

Hi chinch - fair comment that vis a vis where we are now...

Don't agree, though, about they should have been interested in KIST previously; I don't think that their assets / production profile really align with ours; certainly not in balance sheet terms (still debt financed, although that's decreasing) considerable decom liabilities versus our nominal exposure here and they'd never get it anyway with AA holding some 17% of the equity.

No, he wants to acquire us to gain our clean assets / better potential and superimpose his perceived superior management approach on 'sweating' them more aggressively - nothing wrong with that approach but pay the right price for them; not part funding the acquisition with most of our own money.

Clearly, AA has now put them on the spot and they mustn't rest on their laurels any more - they need to move onto the 'front foot' vis a vis the cash hoard, asap, as the first pragmatic step, otherwise they'll wind up being 'yesterday's men' ... sasa.

Unfortunately, Soder, you purchased some 12 months after the sp had trebled, post their transformational BKR deal a few years ago which is where most of todays substantial increase in production / revenues /and cash generation at today's elevated gas price, comes from.

You can't accuse them of being idle in getting the Co. to where it is today over that time frame.

I do agree though, that - that was then and this is now - and they need to devote much effort in utilising their unforeseen riches to much greater effect than just sitting on it.

Hopefully, the Kistos approach will really galvanise them into doing so, rather than the tepid "Well, we'll bid for you, too, then" type riposte - sasa.

Hi Maverick - I quite acknowledge the risks here re: appraisal wells and understand your 'what if' reservations if we have another 'duster' - it would certainly undermine sentiment / knock the sp back temporarily, agreed but not for long in this energy hungry climate, I'd suggest...

Unlike the Rowallan event, we have a good deal more cash now to fund it and a failure might cost only around, say 12% of that, so not too disastrous the way our cash pile is growing anyway.

That ACW / MF have decided to 'go it alone', I took as a promising indicator of what they really think privately about the chances of a success and if it comes in, that's great, if it doesn't, no 'show stopper', either; that's my general take on it, fwiw but we'll know soon enough... sasa.

Hi Maverick - just seen your earlier post at 12.26 today.

Most of your views I generally agree with but I fail to see the logic here of (paraphrasing) - "what does it matter who owns us if Kist promises to hand back a fair chunk of our cash" - giving back to us a part of what we already own is quite condescending to put it politely.

It's akin to a rival asking for that tenner in your wallet to work with and promising to hand you back some of it later if and when he feels like it. He's not the only one who's built a very successful energy business in this game - sasa.

Hi NewK - our sp will fall back, initially, of course , if AA decides to quit, as it will also downward adjust to reflect going 'ex' a hefty 'special divd' if we are to see that.

In the former case, I wouldn't anticipate much of a relapse, perhaps back towards where we were beforehand (290p odd?) as this year should be our best ever and speculation of other interested parties now looking at us, as you surmise, should provide some resilience, too.

In the latter case, one minute many on here were lamenting the absence of a 'special divd' and that the mkt took no notice of our cash hoard, now there's a reasonable chance of one and a bid for us has been tabled to get hold of it all and still opinions are divided; I dunno...

No worries for me on either score, fwiw but DYOR, as always - sasa.