Member Info for shakeypremis

We are in shoulder season now (Autumn) where gas isn't needed as much for heating or cooling (not that there's much of that going on in the UK outside of commercial cooling use) so could see lower NBP for a while. Of course Russia shutting off supply in to Europe could boost demand for NBP. Don't know.

If Truss does bail out the consumer this winter it's got to be supportive of NBP as people will not reduce their energy consumption as much as they might have.

Drop in TTF and NBP might be a little premature...

Market panic selling again with NBP down from highs. Irrational over reaction given the current pricing and how much money Serica will make from that. Same thing regarding the WFT. Irrational overreaction to it given the NBP pricing at the time and the likelihood they would stay high. As long as NBP doesn't crater back under a quid again then I think we are good to sit here, maybe buy more stock if we want and just watch Serica accrue cash. I want a bigger dividend though and would introduce a bit more stability in the share price as would attract a different class of investor.

Intervening in free markets is hardly ever a good idea. Intervening in free markets is how we got in to this energy mess. As long as the energy producers (O&G etc) get the actual free market price I (selfishly) don't care for the minute. But this will not work long term. Price signals and price discovery gone for the residential power market. SUPPLY needs to be addressed to bring down prices. That is what the market price is telling us! Of course the government does the exact opposite and restricts supply even further with punitive windfall taxes. It's so stupid it must have been intentional.

Quotes and settlements now at around 480p/therm. Good God. This is too high. This cannot last.

Hmm, oil and gas will be the new coal and coal will be the new tobacco. I don't think you want to stay out of energy this decade. Going to be wild.

Now being quoted just over 400p/therm the next couple of days before dropping back and then going back up again. Although this all changes by the hour.

https://www.cmegroup.com/markets/energy/natural-gas/uk-nbp-natural-gas-daily.quotes.html

Absolutely insane pricing. Government is going to do something silly. They won't be able to just sit on their hands and reflect on how they did this.

No one here is saying they could do better. No one here is saying that management don't know the reserve situation (why would you even say that? Of course no one thinks that.). What we are saying is there is too much cash on the balance sheet and something needs to be done with it, but so far management have done nothing.

There absolutely are bad/lazy/incompetent/unaligned management teams out there. I am not saying Serica management is any one of those necessarily, certainly not bad or incompetent. But they need to deploy that cash. They have to. Pay it out in dividends or acquire something. If you can't find any worthwhile acquisitions - after NE success/failure result - you think your team can manage/add value to. Start increasing the dividend until you do.

Yes because of Serica's current low reserve life (could change with success at NE), a buyback is pointless. Just a waste of money. Either give us huge dividends and payout that cash or make some acquisitions, preferably in more stable, business friendly jurisdictions than the UK. Perhaps SE Asia or similar. Maybe there will be something worth acquiring from a major in the North Sea divesting an asset but overseas would be better. Pointless me saying it because I don't believe Serica management will invest overseas.

All true, my point was just on comparing market caps. Not really a good comparison given debt and cash levels of respective companies.

Plus Serica has bags of cash.

Enterprise value probably better comparison as Kistos has debt, Serica doesn't.

Now over 300p/therm again. Serica absolutely creaming it in at these prices. Brent is now back at around US$100/bbl too. The board must do something with the cash. Increasing the dividend would be a start. Is there an argument to be made here that the best value purchase they can make at the moment would be the shares in their own company? I think *if* a buyback was to be done it should wait until result of NE drill. Failure will likely result in some cheaper shares ripe for buyback. Success might not result in anything other than a short term spike upward, after it's settled then might be the time to start buybacks.

Unless there's anything very cheap on offer in the North Sea I'd say this company should look overseas. UK uninvestable. Yes, the gas price may stay high here for many years, and it probably will, but it's the uncertainty we have now. What are the government, or indeed the next government going to do next? They are all completely hostile to energy and making any sort of money. I'd go overseas. Asia or something.

https://www.cmegroup.com/markets/energy/natural-gas/uk-nbp-natural-gas-daily.quotes.html

I would guess they want to either try to block this takeover by buying a bigger stake (more votes) or they think a takeover will come at better pricing than they are buying the shares at and thus see short term profit. Who knows really.

Not that they buy much at all and most likely wouldn't even now, but can they given the takeover stuff? Wouldn't it be a closed period for them?

Yes that is what Serica get paid for their gas.

Therms are currently selling for around 260-280p today. You have to look at the day ahead price, not the monthly futures price. Still making Serica a hell of a lot of money though.

https://www.cmegroup.com/markets/energy/natural-gas/uk-nbp-natural-gas-daily.settlements.html

In the short term (if it reopens) it's a demand driver as it'll need to be filled alongside other existing gas demand.

https://www.cmegroup.com/markets/energy/natural-gas/uk-nbp-natural-gas-daily.quotes.html

So with these interventions, daily production has increased by approximately 3,400boe's per day. That's over 50m (50,000,000) therms a year. Now, probably the initial new production rates won't hold but still, gives you an idea of how much these interventions can add, they should do more where it is safe and sensible. 50m therms even at £1.50/therm is quite a lot of dosh.