Serica Energy Share Discussion Threads

[bountyhunter] 12/7/2024 11:36

I'll second that on MT's posts elsewhere which are always well considered and certainly astute.

[brucie5] 12/7/2024 11:15

MT, I'm more interested in hearing your views on SQZ, tbh. I'm sure they are astute, having followed you on SBLK.
I doubt very much if this bb will have any influence on Labour policy wrt the North Sea, though I do expect them to be more pragmatic than many fear.
For the record, I agree that we will need oil for many years into the future, to support the energy transition; and the NS is worth supporting both for jobs and our own energy security.
Question for investors is more to do with the risk balance; I have taken the CEO's large buys as a positive signal and have upped my position accordingly to a regular 2.5% of my folio. The current dividend level is egregious and I wonder what your views are on where this is likely to go to - or how far down, as i presume it can go no further up, nor probably stay the same?

[mount teide] 12/7/2024 09:28

The hugely expensive and completely unaffordable madness of Net Zero 2050

Despite the West spending US$5.1 trillion to date on 'renewables', "Clean energy is still not even meeting the entirety of demand growth,” says Nick Wayth, chief executive of the London-based Energy Institute. “Arguably, the energy transition has not even started.”

Global upstream oil and gas capex is expected to grow by $24 billion this year, surpassing $600 billion for the first time in a decade. Annual investment will need to grow by another $135 billion, or 22%, to $738 billion by 2030 to ensure adequate supply, according to a new report issued this week by the International Energy Forum and S&P Global, two organisations with an enviable track record for the accuracy of their oil demand forecasts.

Labour's energy policy is an incredibly serious national security risk as well as economic lunacy. We will be forced to buy oil and gas from potential enemies, funding their regimes and further bankrupting ourselves. An act of pure self harm ...... authoritarian, woke, virtue signalling, grievance politics was clearly still in its infancy under the last Government's socialist policies - now the Masters of the art are back in power!

Twenty seven years of largely unbroken centre left governments - it's a wonder we still exist and once the ideological lunacy of net zero and open borders accelerates under Sir Kneeler, there is a very high chance the nation will be driven into long term penury and consigned permanently to third world status.

Ultra low productivity in the public sector, record and still increasing taxes, constantly falling quality of life and a hugely self-entitled civil service and local government officers, over 50% of households net recipients of government largesse and a diminishing number of net taxpayers, 10% of whom now contribute over 70% of all income tax raised.......we need a private sector taxpayers party, to take a chainsaw to all of this.

As youngsters, we expected that if we worked hard, we would be able to afford a home and sustain a life of quiet comfort and dignity for ourselves and our children. But governments have not delivered what we voted for, and forced upon us many policies that we have never had the chance to vote upon.

Democracy, it turns out, is a chimera. The steady improvements in life that we expected have not materialised.

Instead we have a broken NHS, the BBC is a left-wing propaganda machine, housing and social services are overwhelmed by mass immigration, the left wing EU obsessed civil service is pursuing its own woke 'progressive' agenda, the armed forces are underfunded while the social security system rewards the idleness of millions, there are too few dentists, roads are strewn with car breaking potholes and endless speed camera's, the police are more concerned with hate crimes than burglars and shoplifters, rivers and beaches are polluted with sewage, and we have sky-high tax and energy bills.

No wonder people are depressed and angry. Yet we have a Prime Minister and most opposition parties incapable of speaking up for the moderate majority, who still have pride in their country and are desperate for strong leadership and guidance through the current immigration, energy and financial crisis.

This vacuum is dangerous. As there is now a brand of politician in the Labour Party whose ambition and reason for entering politics, seems to be to change the way other people think, to coerce them into believing in the same principles as they do. And they see the police, the courts, the prison system, public sector, NHS, schools and universities as the mechanisms through which this change can be brought about.

They claim to be champions of diversity, but beyond skin colour and gender preference, genuine diversity is anathema to them, because they think diversity of thought is undesirable.

The problem is that the three legacy political parties are almost identical politically and no longer believe in democracy, preferring to control the population rather than represent it.

[kibes] 12/7/2024 07:20

With crazy policies on unlimited migration, shutdown of the North Sea, other Net Zero insanity and preventing landlords from selling properties or increasing rent I am just wondering which will collapse first - the country or the Labour Government. This may all blow up in their faces quite quickly within a year when the Budget begins to suffer extreme damage from loss of income coupled with higher costs.

[nigelpm] 11/7/2024 18:28

They will certainly live to regret this insanity. Agree with stemis on allowances not being loopholes but we'll see how they deal with that. I suspect a lot of law suits incoming.

[yasx] 11/7/2024 18:23

The Labour Govt (via the ghastly Rayner) has today also decided it will not be opposing a challenge to the opening of the mine from climate activists - the opening of the aforesaid mine is now effectively moribund.

Days of darkness and inadequate energy are almost certain in due course - and they have barely started their plans which are likely to become increasingly more aggressive.

[kernelthread] 11/7/2024 17:39

The telegraph article doesn't seem to have had much effect on the price here, and ITH has gone up a couple of pence, so hopefully this has taken as much of a kicking as it's going to - for the moment at least.

[yasx] 11/7/2024 16:09

Stemis, It was reported in the Telegraph and as yet they have not withdrawn the article.

Perhaps Labour have realised Ed-iot is looking to go too far too fast and this may attract adverse publicity. However, sagacious chaps like myself know only too well their intentions.

[sawney] 11/7/2024 14:03

...sounds like damage limitation...

[stemis] 11/7/2024 13:21

It's now being reported by DESZN that this is fake news. According to Adam Vaughan, the Times Environment Editor, on X, DESZN has clarified

"This piece is a complete fabrication - it invents meetings and decisions that have not taken place.

As previously stated, we will not issue new licences to explore new fields.

We will also not revoke existing oil and gas licences and will manage existing fields for the entirety of their lifespan.

"We are working with the North Sea Transition Authority to ensure a fair and balanced transition in the North Sea.”

hxxps://x.com/adamvaughan_uk/status/1811385325962330193

[yasx] 11/7/2024 13:17

As I pointed out to Stemis yesterday, with Ed and Kier in charge, closing loopholes means removing every conceivable benefit.

The idiots who voted this lot deserve all they are bound to get.

[mariopeter] 11/7/2024 12:43

Post 6663

First sentence only one that makes any sense and overwhelmingly agree.

[sawney] 11/7/2024 11:46

This guy is a complete idiot....




Ed Miliband has ordered an immediate ban on new drilling in the North Sea in a decision that overrules his own officials and risks triggering a wave of legal action.

In an unusual intervention into what is typically an apolitical process, the Energy Secretary has told regulators not to approve a new round of drilling that was slated for confirmation in the coming weeks.

[mount teide] 11/7/2024 11:34

O/T - bountyhunter

Some investment research on two of the holdings mentioned in my earlier post - much more is available from the group that posts on the individual Advfn threads I set up to discuss the investment case.


AXL - The CEO has sold each of his previous 8 quoted companies for a very considerable capital gain - and has made no secret of this being the intention for Arrow once organically growing production to circa 10,000 bopd.

Arrow, doubled production last year - all self funded from cash flow and, are on schedule to repeat the achievement this year after recently achieving a spectacular result with a 'proof of concept' horizontal well on their highly prized Tapir Block, onshore Colombia asset, one of the most desirable and under-explored blocks in Colombia. Parex Resources, the largest independent in Colombia, recently secured ALL the remaining blocks surrounding Arrow's Tapir Block in a deal(some considered special treatment), announced at the same time as the results of the last Government O&G License Auction.

Every one of the circa 15 ultra low cost wells Arrow has drilled to date on the asset had a 90% CoS and proved commercial, with at least 3 different hydrocarbon pay zones. Each circa 9,500 ft well takes an average of 10 days to drill and a further week to test and put online - and has a payback period of around 2 months. The first horizontal well has a payback period of just 4 weeks, and a net drill cost to Arrow of just $2.75m for a well with a 600m lateral length.

Declaration - bought a 7 figure holding at an average of 7.1p immediately following the London IPO when the stock was hugely unloved - so much so was able to buy in 250,000 share transaction sizes without moving the s/p. Have since increased the family holding to 4.0m share at an average of 11.47p. Largely, on the strength of the CEO's previous track record and low cost growth progress made to date - I believe the share price today is probably better value than when I first invested, as it was initially made on the CEO's record. It has since been greatly enhanced by the growth delivered from proving up and monetising the assets.


Afentra - 'Angola - Block 3/05 - 'National Oil Company Sonangol assumed operatorship in 2005 and has since focused entirely on sustaining production through workovers and maintaining asset integrity. No infill drilling campaigns have taken place for 18 years on the asset. The asset currently produces from around 40 production wells and has nine active water injectors.' ....Offshore Technology

Block 3/05 - what is remarkable about the performance of its conventional, swallow water field's, is that despite not having an infill well drilled on them since 2005, it was possible last year to increase gross production by a remarkable 56% to 25,000 bopd, and P2 by a huge 4m bbls net to AET, on little more than the reintroduction of water intervention to just 15% of the target level.

The 2024/25 plan is to add in ESP, infill drilling and major workovers, and draw up a development plan for the Block's low tie-in cost, appraised satellite fields that could collectively add a further gross 10-20k bopd.

Peak production for the block was 193,000 bpd of crude oil and condensate with a combined 3.0bn bbls OIP. Angola has over 300 discovered O&G fields, but to date less than half have been developed.

This was the principal reason why the Government recently improved the Fiscal terms of the O&G industry - to attract new investment & extend existing licences to avoid the assets becoming 'stranded'. It's had some impressive early commercial success - with Exxon, who are increasingly vacating the rest of Africa, signing up to put $15bn of CAPEX into three large offshore blocks.

The Angolan Government is actively seeking more oil & gas investment. With Afentra having recently built, both offshore and now onshore, a solid commercial relationship with Sonangol, the divesting National state-owned oil company, the management has positioned the company perfectly, as a respected and reliable partner/candidate for the highly material pipeline of future acquisition opportunities that Sonangol plans to bring to the market over the next 2-3 years.

If CEO McDade were to significantly veer from following a strategy other than identifying and buying attractively priced, high quality second phase O&G assets with material reinvestment and efficiency improvement potential to maximise reserves recovery, I would look to sell down my holding.

However, McDade clearly believes Afentra has an opportunity to replicate the success of Tullow, Talisman and Apache in the North Sea 20 years ago, not least because fortuitously Afentra has the tail wind of the recovery stage of a new oil market cycle, a strong post pandemic recovery in demand, and a major programme of disinvestment of high quality assets that are no longer material to oil majors and NOC's in a number of mature O&G basins around the world.

The holy grail is to find a lowly valued second phase O&G company with low producing costs, strong cash flow generating assets and highly material organic and inorganic development potential, run by an experienced management in a high growth, high energy price mature market, thinly contested for high quality assets being vacated by oil majors and NOC's, due to owners and Governments willing only to consider companies with management capable of demonstrating a previous track record of managing O&G assets to the highest operational and safety standards.

Should the company also benefit from a regional Government offering industry leading fiscal terms, long license extensions to attract new investment to maximise recovery from large mature fields, and a drilling/oil service sector still largely beaten down by the ravages of a long recession, together with a location in a region with mostly benign sea and weather conditions enabling shallow water offshore field production development and maintenance work to be carried out year round, that would be the icing on the cake.

On the balance of probabilities, over a 2-3 year view, I consider the risk/reward of an investment in Afentra today as good as any O&G company in my portfolio. Hold a 7 figure position at an average of 25.7p.

This Seeking Alpha article by Robert Whelan, an experienced, well researched investor, explains the strong fundamentals of the investment case in light of the recent Angolan acquisitions, which as I suggested in a post on the Afentra thread early in 2023, is likely to be acquired for next to nothing should, as proved the case, completion were to occur in late 2023 or early 2024, due to the enormous build-up of accrued revenue due to Afentra from the effective economic dates of the deals in 2022. The combined net price for all three working interest shareholdings in the asset, has since been confirmed at an incredible $9.7m!


Afentra Acquired Assets Worth $255m, With Only $37m Cash: Here's How:

AIMHO/DYOR

[plasybryn] 11/7/2024 08:08

Buy Serica Energy, look at the yieldBy Lucian Miers | Wednesday 10 July 2024Nice buy recommendation on ShareProphets. 15% yield.

[bountyhunter] 11/7/2024 05:50

decommissioning costs/liabilities of potential acquisitions need to be considered

[pol123] 10/7/2024 18:49

assets generated revenue of $644 million last year. All well and good, then strip out opex/capex/ NS tax = nothing left. Who wants to buy NS assets. May be able to run the assets into the ground, no capex & min opex

[yasx] 10/7/2024 15:54

Stemis,

Nor do I but my interpretation of the language from Kisr/Ed is that they will (or currently intend to) encapsulate the same u der the unbrella of loopholes.

[stemis] 10/7/2024 15:32

yasX,

I don't consider normal capital allowances as loopholes but I guess we'll have to see

[ammons] 10/7/2024 13:15

Mad Milliband has also boasted about "proper windfall tax" of Shell and BP "obscene" (overseas) profits. I am fascinated as to how Reeves is going to impose and collect it or if the threat is pure hot air as seems likely. If that is hot air, what else might be?

[yasx] 10/7/2024 12:49

Stemis,
They have referenced closing ALL loopholes - which, on sny view, was a reference to removing all allowances and capex deductions.

Ed has a remit - just look at the clowns appointed yesterday in his department - all net zero climate criis warriors, none of whom think it appropriate for themselves to buy an electric car oruse public transport.

[bountyhunter] 10/7/2024 12:26

Good post MT. Any of those three might make a good acquisition away from NS waters.