Serica Energy Share Discussion Threads

[nigelpm] 09/2/2024 20:41

Hopefully Labour will continue to U-turn up to the Election -

[nigelpm] 09/2/2024 20:06

Yes Stemis - that was one of Mitch's real drivers for the Tailwind deal - diversification away from gas and indeed since then the gas price has tanked and oil is barely moved.

The real mistake of Serica mgmt was not hedging the gas price significantly more than they did at some of the loopy prices - clearly they wouldn't have got away with hedging at the very elevated levels but 125-150/therm would have been sensible - as ever though Hindsight is a wonderful thing.

[stemis] 09/2/2024 19:44

Oilinvestor

While I disagree with Mario in some aspects, on an EV per barrel basis nobody rational can deny that Tailwind is one of the most expensive acquisitions in North Sea history (objectively speaking).

But that's not what we were discussing. Mariopeter was trying to dress the KIST 'offer' for SQZ as a missed opportunity. The reality is that it would have been no better than the Tailwind acquisition (which he thinks was an awful deal, so ergo...).

KIST shareholders, of which I presume he is one, have seen the value of their shares crumble more than SQZ's since then.

The reason that KIST has relatively underperformed is because they had a more geared balance sheet when gas prices started to fall and didn’t have the cash protection. They were also heavily exposed to gas prices (sig more than SQZ).

Perhaps KIST should have been diversifying away from gas then...

[nigelpm] 09/2/2024 19:23

You seem to be suggesting mario that Mercuria are great at adding value for themselves - given they bought a chunk of SQZ effectively at £2.80 one might argue they have been pretty poor actually don't you think?

[mariopeter] 09/2/2024 19:01

Looks like you and I both know the private equity beast OilinvestorAl. Horrible greedy people and they bagged half a billion from no outlay and probably upset a large number of people along the way.

Good weekend to you and thanks for your note.

[oilinvestoral] 09/2/2024 17:59

Just read your 4283 post MarioPeterWell done on your foresight! You broke down (using facts figures & numbers) why no oil company should ever do a deal with private equity who mismanage and leverage to the gills! Best of all you analysed it when the pugnacious happy clapper was telling everyman and his dog that Tailwind was an amazing deal ! Credit where credit is due ! Well done ! Zero hindsight involved (clap)!Some people shouldn't do their own research! They should read research from people like your good self who clearly know what they are talking about! Have a nice weekend sir!

[mariopeter] 09/2/2024 17:37

Nothing retro about post 4283 on this board.

[nigelpm] 09/2/2024 16:12

Masters of hindsight and capable of telling future returns = your average ADVFN poster.

[ashkv] 09/2/2024 16:09

Mariopeter agreed!!!

Lets compare SQZ vs KIST in one year.

Mitch Flegg inflicted a Waterloo on himself with Tailwind!!!

Sad - comes across as a personable individual but something was amiss with him / advisors evaluation of Tailwind Deal.

And Tailwind is so unforgiveable given Windfall Tax 2 was already in place and Labour coming to power ever so likely given Cabbage's wrecking ball to the Tory party!!!1

[ashkv] 09/2/2024 16:06

Ceteris Paribus the below should compensate for increased Capex and allow for a juicy dividend ($80 plus Brent contingent).

An additional USD 70mn cash flow from Tailwind Assets in 2024

SQZ PR has been very active on this board.

H1 2023 Tailwind had hedged 11,000 bopd at $58

From Interim Results ->

Oil - fixed pricing under oil sales agreements (equivalent to oil price swaps): for the 2H 2023 period approximately 11,000 barrels per day at an average price of US$61 per barrel, for the 1H 2024 period approximately 5,000 barrels per day at an average price of US$70 per barrel, and for the 2H 2024 period approximately 2,700 barrels per day at an average price of US$80 per barrel.

[mariopeter] 09/2/2024 15:47

Stemis

If you want to compare both managements by a chart you should probably include Rockrose Energy on the chart before the KIST management sold that Company.

Bit irrelevant now as SQZ management changing but for me to invest here v KIST I would want to see a proactive Mercuria with some good deals cause they got hard earned SQZ stock for fairly dull E and P assets and a large deferred tax asset. So far it looks like Mercuria will not be the dynamic partner that Flegg thought they would be and in fact I would guess the reverse as I note SQZ is for now confined to organic growth.

Flegg would not listen and why he was so aggressive to Andrew Austin and KIST can only be put down to someone like a child who could potentially have his toy taken away. The pram was rocking very wildly anyway. Mercuria have sorted him out though which could in fact be a very good thing.

Watching.

[oilinvestoral] 09/2/2024 12:55

Pugnacious Mendacious: " It tells me most private investors are terrible with numbers."---------Me thinks someone is projecting much ! Lmao

[oilinvestoral] 09/2/2024 12:26

The point is Mario that you are lauding KIST as "good acquision business men" and the Tailwind deal as "very poor"----Stemis While I disagree with Mario in some aspects, on an EV per barrel basis nobody rational can deny that Tailwind is one of the most expensive acquisitions in North Sea history (objectively speaking).The reason that KIST has relatively underperformed is because they had a more geared balance sheet when gas prices started to fall and didn't have the cash protection. They were also heavily exposed to gas prices (sig more than SQZ).That is all going to change with their development assets in Norway !

[dcarn] 09/2/2024 12:02

Additionally, the Company has entered into a drilling contract with Serica Energy (UK) to utilize the Ocean Patriot for two plug and abandonment (P&A) wells in the U.K. North Sea. The program is estimated to commence in March 2024 and to continue for approx. 60 days. The contract represents over $10 million of additional backlog, excluding mobilization.

[stemis] 09/2/2024 11:38

The point is Mario that you are lauding KIST as "good acquision business men" and the Tailwind deal as "very poor" and yet SQZ shares have relatively outperformed those of KIST.

[nigelpm] 09/2/2024 11:33

No - you're missing the point Mario - things are totally different in the E&P world and particularly North Sea since 25.7.22.

[mariopeter] 09/2/2024 11:11

Cant do an overlay of combined KIST and SQZ cause that was the real deal. Think you are missing the point.

[stemis] 09/2/2024 11:04

Mariopeter,

Try doing an overlay of KIST's share price on that of SQZ's since 25.7.22

[mariopeter] 09/2/2024 10:54

The thing to have done Stemis is accept and reinvest in the combined entity if it was too cheap. At least that way good acquision business men would have been around and the Tailwind assets would still be owned by Mercuria. Good luck with the organic growth cause that was not Flegg's hope at the time. I appreciate the super tax has not helped. We will never know but Tailwind was very poor and I know KIST management would not have entertained it. KIST do a Mercuria style deal at base wholesale prices and then sell everything retail.

[nigelpm] 09/2/2024 10:31

Yup - another nonsense argument I see trotted around twitter and elsewhere. It tells me most private investors are terrible with numbers.

[stemis] 09/2/2024 10:29

Two fingers to KIST (£3.82 offered)

KIST's 'offer', as of 25.7.22, was 213p cash plus 0.4 share of KIST (now 0.4 x 142.5 = 57p). However since then SQZ shareholders have received dividends of 31p, so maybe a fair comparison is 239p. More than current share price of 189p certainly but hardly a knock out premium. Of course we don't know what the share price of a combined KIST+SQZ would be; possibly less than 142.5p...

[mariopeter] 09/2/2024 10:15

Flegg leaving.

Flegg a wonderful oil and gas man but imo a bad business man. Two fingers to KIST (£3.82 offered) and welcome Mercuria (the medium sized tapeworm).

Not in KIST or SQZ ..tax (the titanic tapeworm).

[nigelpm] 09/2/2024 10:13

Further to the above. I think the biggest risk is what Labour end up doing.

Whilst retrospective tax changes are generally frowned up and probably unlikely - SQZ is hugely exposed if they do decide to mess with them - not least in the huge tailwind potential offsetting.