Serica Energy Share Discussion Threads

[spectoacc] 01/8/2024 08:06

No follow-through from yesterday's u/g, but the fall on what was known already did seem odd, when others weren't following.

Two routes for SQZ from here - as others have suggested, edge out of the North Sea and invest elsewhere. Or see a volte face from R Reeves as the imperative to keep the tax money rolling in becomes apparent.

At some point, it has to dawn on Labour that it makes no difference to CO2 & climate change whether the oil/gas is produced here, or in the Middle East/Russia. We're still going to be using it for the foreseeable, so produce/tax it here.

[nigelpm] 01/8/2024 07:58

That would be nice wouldn't it farm - I find myself saying the same things on all threads - ;-)

[farmscan] 01/8/2024 07:47

Would it be possible to keep the thread more directly related to Serica and O&G. TIA

[melton john] 01/8/2024 07:43

Absolutely right CB7. You were "contracted out" of part of the state scheme in return for making company pension contributions. This meant a reduced state pension alongside your company pension. Companies have gone bust or been taken over meaning the company pension you thought you were going to get has probably a shortfall. Coupled with this company pension contributions have been haphazard to say the least and as I said earlier adjustments for inflation discretional for contributions before 1995. Several companies that I know of have made very little addition to counter inflation resulting for people who retired around 1995 in suffering severe hardship. Hence my anger at the nonsense in previous posts.

[cb7] 01/8/2024 07:29

The thing to remember with UK state pensions is that many do not receive the full amount. About 75% get the full whack of the old pension, but only around 50% get all of the new state pension. (I had 43 years contributions, but still not a full pension). Lets face it a state pension on its own is insufficient for a reasonable retirement. You have to ensure that you own your home in full and have savings and/or a company pension as well, or else its going to be a struggle.

[melton john] 01/8/2024 07:25

Up yours Brucie5

[lord gnome] 01/8/2024 06:04

Well said Melton John. I got married in 1974. Yes, we had 1970s house prices, but we also had 1970s incomes. Our married life started with 2 full-time jobs and three part-time jobs between us to make ends meet. Inflation also took our mortgage rate up to 15% at one point and just under 70% of my main salary went on the mortgage. Happy days.

[croasdalelfc] 31/7/2024 18:56

Rig has moved to Gannet

[kenmitch] 31/7/2024 17:31

Exactly SteMis. So many pensioners don’t seem to realise that they have had it so much better than so many younger people today. Buying a house was so much easier for starters. Now even people on relatively high pay can’t afford mortgages and in many places can’t afford to get on the housing ladder. Pensioners saw their initially difficult to pay mortgages soon made easy to pay thanks to much higher inflation than we’ve had for the last 20 years or so. People who invest here in shares like we do can manage without a heating allowance and state pensions protected by that triple lock.

[stemis] 31/7/2024 16:48

You think you need a heating allowance more than a family on minimum wage, struggling with children, in a rented house with no capital and little chance of accumulating any?

[stemis] 31/7/2024 15:48

I thought so. Tax rate won't be 78%. SQZ has substantial losses b/f so the rate will be more like 55%.

[tabhair] 31/7/2024 15:37

I have just modelled the worst-case scenario, i.e. a flat 78% tax on all profits and not considered any capex deductions.

[stemis] 31/7/2024 15:25

What tax rate are you using?

[tabhair] 31/7/2024 14:41

Auctus are the in-house broker for Serica so this note will not have been published without consultation from management.

UK energy companies taking a greater tax hit obviously isn't ideal, but as a few of us have been pointing out the last few weeks, this has already been well priced in. When I put the updated taxation into my model, I have the company earning roughly between £60m and £100m with oil at $70 at the low end and $90 on the upper end. Even at lower prices, Serica is still profitable.

We will probably never see the bumper profits of £180m that the company did in 2022 but this should still do well going forward.

[bountyhunter] 31/7/2024 13:33

£4/sh sounds good to me :)
That's when I should have sold of course as Steel wisely did but maybe we will head back up there if things go well and/or there is an accretive deal outside of UK waters.

[plasybryn] 31/7/2024 11:49

Implications for Serica• Notwithstanding the proposed fiscal regime changes, the fact that the62.5% capex uplift for SCT purposes remains in place means that ourvaluation for Serica on a worst case scenario (of capex not beingdeductible for EPL purposes and no sunset date for the EPL) hasincreased to ~£1.90/sh from ~£1.80/sh. Under this scenario Buchanwould however not be developed. This valuation still represents >50%upside to the current share price.• Assuming a sunset date of 2030 for the EPL (in line with thegovernment's announcement) sees our valuation increase to ~£2.30per share (=90% upside). This assumes that Buchan is not developed.• Under a low commodity price scenario (GBp57/th for NBP UK gas pricesand US$74.21/bbl for Brent, the level below which the EPL would fallaway), Buchan is sanctioned and our valuation for Serica would be~£4.00/sh.

[plasybryn] 31/7/2024 11:47

Auctus - £2.90

[plasybryn] 31/7/2024 11:46

Broker Note out?

[scepticalinvestor] 31/7/2024 10:53

Yes, lots of those so called pros who boasted about selling at the lows 'with only a 3% loss' now have egg on their face.Classic

[scepticalinvestor] 31/7/2024 10:21

Poor sods who sold out at the lows yest

[stemis] 31/7/2024 08:50

Yeah, because pensioners have had a really rough time with their triple lock