Serica Energy Share Discussion Threads

[waterloo01] 08/2/2024 16:28

Unless you know the cash flow forecast, not sure you, or I for that matter can be certain.

[oilinvestoral] 08/2/2024 16:22

"Can't see need for any divi cut. Costs remain under $20pbl, "------Yeaaah unfortunately dividends aren't paid on a post OPEX basis. They are paid post OPEX, G&A, CAPEX and TAX- on a FCF basis. The $20 isn't all that relevant if you have hundreds of millions of CAPEX projects

[oilinvestoral] 08/2/2024 16:18

The 15% drop in production in 8 months had nothing to do with it! The summer shutdown being over budget and taking longer than planned had nothing to do with it! The cash balance dropping by over half a billion dollars in 12 months had nothing to do with it! The numerous shutdowns across all assets had nothing to do with it! The share price halving in 12 months had nothing to do with it! Lord have mercy! LMFAO

[nigelpm] 08/2/2024 16:08

Maybe that's why Flegg fell out with the board...

Quite possibly.

It can't have been too serious otherwise no way they'd have kept him on for three months as CEO and then another three months as an advisor or indeed put him up this morning in front of sell side analysts.

The only nugget we've had is from Alex Stahel - who believes :

"Yes, but Mitch didn’t wanna leave I can guarantee u that from my interactions."

and

"Perhaps a disagreement over shareholder returns"

so certainly a reasonable chance.

[oilinvestoral] 08/2/2024 15:23

Good debate StemisI'll try and address your points 1 by 1:" why would they have increased their debt facilities?"It certainly wasn't to use the debt to pay dividends ! I'll tell you that for nothing. My honest opinion was that they wanted to diversify either via asset deals or M&A. Also to enable them to execute the aggressive CAPEX programme in 2024-2025! As for Flegg & buybacks, I didn't say Flegg! I said "Fleggy & the BOD" ! So unless the other BOD members are also going , we may have an issue. Mitch was simply the mouth peace that communicated their plans. You say: " (I quote) "Dividend policy to be maintained" [RNS - 20 December 2022]"Exactly!!! but look at the date ! A lot of things have changed since then! Our NET cash has gone down from £456.8 million to around £90 million !! Net cash inflow from operating activities of GBP560.1 million due to the record gas prices in 2020. Gas prices have been decimated over the past year. Oil prices have also fallen from 90-100 in late 2022 to 70-80 right now! Our production levels have dropped significantly since Q1 2023! We were doing 47-48k in Q1 after we completed ganett 4! The average for the year was 40k! Half 2 killed us! Look at the slide in the presentation showing performance. The numerous unplanned shutdowns at Triton , BKR and Erskine were all not in the plans. The summer shutdowns were significantly extended. All these factors contributed to throttling cashflow! You say "Maybe that's why Flegg fell out with the board... "Unfortunately not! He didn't "fall out", he was sacked due to poor operational performance and project execution!

[stemis] 08/2/2024 14:44

I don't think the board would be too worried about going into net debt, otherwise why would they have increased their debt facilities? They are not maintaining debt just so they can have a nice cash balance.

As to directors just buying as a show of support. Well, Flegg is going so can't see why he'd do that. As to a buyback, again it won't be Flegg that will decide. The net affect of a buyback of course would be to increase Mercuria's percentage.

Personally I'd much rather a dividend than a buyback and I think it would be duplicious to cut it. Assurances were giving during the acquisition of Tailwind that (and I quote)

"Dividend policy to be maintained"

[RNS - 20 December 2022]

Maybe that's why Flegg fell out with the board...

[oilinvestoral] 08/2/2024 14:02

I also don't want it to be cut as I have a substantial sum to be gained if it's maintained. Don't feel too bad for Mercuria. They have already received multiples of the amounts they invested in tailwind as hard cold cash following the deal. They can live with a slightly reduced divi for 6 months.In the longterm, it has zero relevance unless you're a trader looking to make a quick buck in 2024! If they can execute the current 3 year investment programme , the shares should be multiples of where they are today by 2026!

[bountyhunter] 08/2/2024 13:45

On this one I agree that a dividend cut is unlikely since Mercuria would be reducing their own receivables given the significant holding handed over to them as part of the Tailwind acquisition. That will probably save us from them cutting the dividend, not that I considered it to be likely in the first place. The only thing that does concern me is the recent lack of clarity re the dividend policy going forwards and Al does have a point there although it is quite possible that that is of no significance. Also recent director buying does not suggest that any dividend cut is in the current plans.

[waterloo01] 08/2/2024 13:39

Added a few. Can't see need for any divi cut. Costs remain under $20pbl, Erskine aside, most of the downtime is in the past, the exploration potential of the workovers etc, seem prudent as low cost, instant tie in and is tax efficient.

[oilinvestoral] 08/2/2024 12:36

Spawny We would be up in arms if they weren't buying after a catastrophic share price drop that they were largely responsible for! They need to buy to support the share price! Simples I don't expect any cut to be long lasting or prolonged. As the CAPEX/ tax rebates will start to flow ... Their silence on the matter during the update and the presentation says a lot.... Do the numbers and work out the FCF in the next 6-9-12 months.

[oilinvestoral] 08/2/2024 12:30

Buyback programmes are unlikely for a number of reasonsFleggy and the BOD absolutely detested them ! He has addressed this question many times and they feel that investing the cash and growing the assets is a better use of capital.The pink elephant in the room is that purchasing shares in a large quantity would increase Mercuria's percentage holding and ultimately lead to crossing the 30% barrier which would force them to initiate a takeover ! Oh BTW Oil trading houses are not known for their philanthropy!!!

[oilinvestoral] 08/2/2024 12:26

Hi Stemis Even with a reduced dividend the shares are arguably cheap. The directors aren't traders ! Unlike PIs, they are looking 3-5 years into the future (and possibly longer). It doesn't matter one jot to them in 2029 what the final 2023 dividend was! Whether 10p , 20p or 30p . By then, the shares should be multiples of today's levels and the 2023 final divi will be no more than a rounding error. Also directors buy shares for a wide number of reasons one of which is to support a faltering share price. I can't remember the name of the company but a few years there was literally a company that went bust weeks after directors purchased. They are also human ...

[nigelpm] 08/2/2024 12:03

I also agree with that spawny - it would seem unlikely.

[spawny100] 08/2/2024 11:56

I very much doubt management would be buying in if they thought there was going to be a Divi cut.

[nigelpm] 08/2/2024 11:55

I do get the point that as a mgmt team you want to avoid a drop in share price through the decision to take a knife to the dividend but equally I'd prefer they concentrate on doing the right thing for long term value. At current prices I'd certainly trade a dividend for a sustained buyback programme and value add acquisitions such as ENQ or DELT that could accelerate growth.

As ever there's a balance to be had.

[nigelpm] 08/2/2024 11:48

I think the question of the dividend is likely to be more based on whether it's preferable to hold the cash for an acquisition or whether pressure to instigate a buyback programme is high - Mitch tended to be averse to them - so that may well change.

[stemis] 08/2/2024 11:43

Oilinvestor,

Surely if they cut the dividend the shares will fall. Surely the directors know this, so why would they buy shares at this point?

The finals should be out in mid April so we should find out then. At this point therefore I'm not minded to buy more until I have clarity or more confidence over the dividend.

[oilinvestoral] 08/2/2024 11:40

Yes , saying if you need help with any of the technical terms in a the presentation, give me a shout and make use of my decades experience in oil & gas is the height of antagonism!!!Jeezus some people are angry inside! You're a 1 angry little fellar aren't you ? Yikes!!! PS: my offer has been rescinded to you ! Too late!

[nigelpm] 08/2/2024 11:37

Sian dipping her toes in also - I suspect the discussion in mgmt meetings has been "what on earth is the market doing?" - I tend to agree.

[oilinvestoral] 08/2/2024 11:34

Stemis I think the dividend cut is extremely likely now! You have to read between the lines and may have to do a basic FCF analysis based on over a quarter of a billion dollars capex programme!Also, the silence on the divi in a 50 slide presentation speaks volume!

[vaston] 08/2/2024 10:33

SYME IS NOW READY TO FLY

[monet] 08/2/2024 10:27

Every little helps. BBC News.

Source oil and gas locally, urges Equinor energy boss





Labour is to announce that it will no longer spend £28bn a year on environmental projects if it wins the upcoming general election.