Member Info for shakeypremis

It becomes a weighing exercise between the CAPEX of your project/s and the NPV of the after-tax cashflows taking in to account the increased WFT and the upfront CAPEX you can write off-against it and also the NBP gas price. Gas and oil MUST stay high for the NS to be viable. The WFT and enhanced WFT that seems to be on the way may actually guarantee this. IF DA NBP starts to average 200-300p+/year Serica will still make a lot of money.

LOL, bit late for that given existing WFT and corporation tax increase and talk of increasing personal taxes.

Not that it will really make all that much difference given 65% current effective tax rate. Where did you hear this?

Spewing the my proverbial coffee here... he WON'T be extending it???

Best to invest overseas soon as who knows what governments will do when they see capital flowing overseas en masse. If NE doesn't come in, Serica must return capital or invest overseas.

Come on NewKOTB, nothing can be said to dissuade them. THEY WANT TO LOWER INVESTMENT in the North Sea and CAUSE energy shortages. Crises are a catalyst for 'change'. That said, I do think there is perhaps an element of them knowing gas prices will remain massively elevated so the net effect to profits in the NS will actually still be positive for companies operating there.

The WFT is NEVER going away, that has to be your baseline assumption. If NE is economic and pays back quickly, develop it. Nationalisations are the next step in all this and that has to be your assumption too. So if NE isn't a quick payback then probably has to be mothballed and company winds down NS assets and either pays out money as dividends or invests overseas.

Does anyone know why Serica don't sell in to the futures market and have to take day ahead pricing? I can't seem to remember the reasoning behind it. Obviously they do have hedges (that are rolling off).

Short of NE development I would broadly agree TerryM1, while there is going to be good money to be made in the NS with high O&G prices, the environment is such and so hostile and with a very real possibility of a Labour government on the horizon, Serica should pay out all cash or invest overseas.

I agree, that's why I said 'any accretive acquisition THIS management team can do'. Realistically they would need to do much better. Surely, they aren't considering anything yet (unless it's a barn burner of deal of course) until the result of NE is known. Developing that if successful has to be one of the best uses of capital possible. If it comes in then cash balance should be spent on it AND share buybacks (assuming the share price doesn't rerate substantially) or greatly increased dividends if the share price rerates.

They do nearly 10,000bopd don't they? Wouldn't exactly be a small amount relative to Serica's production levels. And anyway, any accretive acquisition THIS management team can do, making use of the HUGE amount of cash Serica has on the balance sheet has to be at least positive.

Would also be nice to be less exposed to the gas price too.

Can't remember terms of the Kistos deal but would the board have lost control and been mostly kicked out?

From the article and made me laugh;

"“The NSTA is committed to ensuring the growth of the UK’s energy supply and will not hesitate to take action in cases where companies fail to meet their obligations.”"

Seem they and the government are totally out of sync.

I don't know if anyone else has noticed but media pushes the 'narrative', the 'agenda', sometimes with or against government. So what they should or shouldn't report on based on public interest has nothing to do with anything. There are those that have the money and power to shape the world in their interests and then there's everyone else.

A sensible system that might ensure you don't trash a vital energy industry in your country is a sliding scale royalty rather than a tax. As the selling price for gas increases those therms you sell in certain price bands attract a higher royalty. Resource producing countries do this already for certain commodities like copper, oil etc etc. It's still egregious theft of course. However, if you were trying to engineer higher prices for longer then you might just try to stifle investment by setting a rate of tax so appalling that few consider the jurisdiction worth risking anymore.

If gas prices remain high, which I think is a reasonable assumption then NE is going to be a good asset to develop for Serica and will through off large amounts of free cash.

It's possible our treasonous and duplicitous government actually believes or somehow knows energy prices are going to remain high for a LONG time and this is why they think they can get away with the egregious WFT as producers will still make a lot of money. I still think the WFT definitely brings investment down because you just don't know where oil/gas prices will be in the next few months, let alone years, which is the timeframe these investment decisions have to stack up for.

What gas price are you using for that assumption Infor? Chees.

I am not saying it would be a good result but you know that's exactly what Labour etc would call for if company's decided to deliberately reduce production.

You keep thinking about all this from a position of rationality and what would actually benefit the people of the UK. None of this is being done with our best interests at heart. People need to start to come to terms with the fact that government is subverted and has been working actively against us (whether individual people in government know it or not) for quite some time now.

There's nothing that can be done. Government has too much power worldwide. The WFT will NEVER be removed. Labour will get in eventually and they certainly won't get rid of it. If companies don't produce to their best ability this government of the next one will nationalise. The only thing they can do is stop investing, run down assets and invest overseas.

The thing is, if oil and gas prices really do stay higher for a lot longer (many many years - which is my view) then this WFT tax increase will of course limit after tax profits that *could* have been made but will it result in lower profits than would have been made without the WFT AND without the high prices? I don't think so. I think there is still going be huge money made in the North Sea simply by virtue of very high oil and gas prices that are here to stay and will be exacerbated by these stupid taxes lowering investment. Imagine if we start seeing 250p+/therm average prices across the whole of the year for years to come.

Yes, the board are not aligned with shareholders. Some big money has to come in and become an activist and replace the board and make the company work for shareholders.