Serica Energy Share Discussion Threads

[nigelpm] 01/3/2024 22:08

Have a great weekend all.

[nigelpm] 01/3/2024 22:07

Or how about this from :




Substantial tax losses acquired with Tailwind
• Potential to generate over £400 million of UK
tax offsets
• Benefit of Tailwind tax losses since 23 March
2023 has lowered Serica’s overall tax burden
• Unpredictable fiscal policy and high rate of tax
deterring investment in the UKCS

[nigelpm] 01/3/2024 21:51

The evidence is all there but you and others continually whine about Tailwind when it was a pretty good deal all ends up.

[nigelpm] 01/3/2024 21:50

And by the way RE: tax losses -

The net deferred tax liability position of £52.0 million at 30 June 2023 decreased from £153.3 million at year end 2022, mainly following the introduction of the significant net deferred tax asset position of £95.0 million upon the Tailwind acquisition. This comprised deferred tax assets recognised on tax losses and future relief available on decommissioning partially offset by deferred tax liabilities arising on property, plant and equipment balances. Deferred tax liabilities arising upon the group's PP&E balances will be released in future periods as those balances are depleted.

[nigelpm] 01/3/2024 21:48

It's pretty simple and in the RNS if you care to read them.

[oilinvestoral] 01/3/2024 21:46

Never trust an accountant who can't count ! Have a nice weekend all!

[nigelpm] 01/3/2024 21:45

No comment on the numbers then at all.

Actually £12 per P2. Wrong again Al.

[oilinvestoral] 01/3/2024 21:44

Include the hedging costs that were forced up on us and the total is actually more than £17 (but being a bean counter you know that)!... Do you remember those hedges at a shockingly low price that weren't even disclosed at the time of the deal ? The ones we found out about 3-4 months after the deal closed. The ones that don't pass the smell test that were taken out by Mercuria from Mercuria! That's what the kids call hands in the cookie jar! Are we taking about the tax losses that still have us an egregious amount of tax this year and next ? Anyone still trumpeting that guff shouldn't be allowed to manage their own money IMHO! Even Fleggy stopped flogging that dead horse recently !!!!

[nigelpm] 01/3/2024 21:33

It wasn't as simple as just saying they paid £17 per 2P though was it?

In fact it wasn't even £17 per 2P -

Value of Serica Equity - £367m
Tailwind Net Debt - £215m
Cash payment - £58.7m

= £641m / 55.5 mmboe 2P

updated Tailwind reserves report shows increase in 2P reserves from 41.8 million boe at 1 January 2022 to 55.5 million boe at 1 January 2023, replacing 2022 production four-fold

= £11.55 per 2P


You also negate the value of the tax losses and any other synergies - i.e. cheaper hedging and admin costs

[oilinvestoral] 01/3/2024 16:43

I think at this stage even the most ardent of happy clappers & supporters have conceded that the deal at SEVENTEEN pounds a bbl was egregiously expensive! You need a special type of blinkers to view it any other way IMHO! Is tailwind a terrible company ? No ! The rational of adding oil isn't a bad one IMHO! Paying $21.5 / bbl is shockingly bad! Worth $8/bbl max and should've been done without dilution ! Then again you don't need to be a genius to work out that buying from oil trading houses / private equity is never a smart move !

[nigelpm] 01/3/2024 16:26

upomega - because the board don't just think about the next year and also don't have perfect hindsight. Their decision may well still turn out to generate more shareholder value than the alternative. I think it's too early to say either way.

[oilinvestoral] 01/3/2024 15:52

Upomega The deal was about snouts in the trough and about Fleggy keeping his job! As demonstrated by the dalliance with KIST, SQZ cash was very attractive to other companies and he would lose his £1 million / year salary if someone took over the company. So either the cash has to go or he has to find another job!

[oilinvestoral] 01/3/2024 15:49

Please don't "shudder"! The cash in hand would've been more than the current market cap. Simples !Without the dilution incurred , we would've had 250p in NET cash & ZERO debt!Now even with a terrible gas price, surly the BKR assets must be worth 50p, or 30p/ share worst case scenario? That's 280-300p / SQZ share!

[ashkv] 01/3/2024 14:13

It was 26k of gas plus liquids production for SQZ!!!

Moreover, prior to increased windfall tax in Nov 2022 cash post 2022 tax was equal to 205p of SQZ share price - if I recall SQZ cash was this high even after a significant Windfall Tax payment that was made in Oct 2022.

Also SQZ share holders paid 2022 dividends for the shares issued to Mercuria in Early 2023!!! Should be included in the deal cost along with Decom costs!!! Close to USD 1Bn in toto for paltry 15-19k high tax decrepit FPSO production that was hedged for peanuts!!! A scam!!!

2023 dividend to Mercuria shares was in addition to deal costs and not earned from any of their assets - as it accrued from SQZ assets!!!

Let me reiterate the onerous Tailwind 2023/2024 Capex and Decom costs and tragically that the majority of 2023 Tailwind production was hedged at mid 50s Brent...

You should shudder at the Tailwind Deal - not at the low Opex SQZ gas which would still have been hugely profitable and manageable final WFT taxes given the expensive $100mn duster in end 2022

Farmscan1 Mar '24 - 10:25 - 5705 of 5705
0 2 0
A large chunk of the cash has gone in tax (139m) and divis (89m). I shudder to think what the share price would be today with just c23k boepd of gas at £36 boepd before deducting op ex.

[farmscan] 01/3/2024 10:25

A large chunk of the cash has gone in tax (139m) and divis (89m). I shudder to think what the share price would be today with just c23k boepd of gas at £36 boepd before deducting op ex.

[upomega] 29/2/2024 21:06

Without the tw deal we would be not far of cash Vs mkt cap due to the tw deal. Serica had numerous chances to amend or cancel this deal when the wft and epl landed,but chose not to. Why?. Many holders including myself opposed this deal and were ignored. Why?. To make matters worse the largest holders voted this through and even in some cases increased their holdings. Why?
Very odd all round inmho dyor etc

[sageofonion] 29/2/2024 19:40

Before the TW deal, cash in the bank was heading towards market cap, providing a solid floor for the share price. Now the share price is 40% lower and in freefall. What a fantastic deal!

[ashkv] 29/2/2024 16:46

Just a lazy guy who doesn't like to venture from the UK - Tailwind was a lazy foolish deal and now share price of SQZ nearly half prior to when deal was announced!!!

Good riddance to this empire builder share holder value incinerator.

Board should hasten his exit!!! Perhaps share price will then recover from the doldrums!!! SQZ trading at present below the Enterprise Value ascribed to the Tailwind Deal...

Bonfire of share holder cash by Flegg... His bonus and vested options etc should be clawed back for Fiduciary abdication!!!

Lost big on a spread bet and forever a grudge will I bear!!!

pineapple126 Feb '24 - 16:19 - 5699 of 5701
0 2 0
Sounds like he is working for the government....lol
Mitch Flegg, comment

"We are pleased to have completed this transaction which creates the possibility of adding a third production hub to Serica's North Sea portfolio. As a potential domestic source of oil and gas with a low level of production emissions, a provider of quality jobs for UK workers and a generator of much needed future tax revenues, Buchan is the sort of project the UK needs as part of the energy transition."

[74sjh] 27/2/2024 03:02

Unfortunately the tweets put out by politicians - Labour in particular, demonstrate absolutely no understanding of the consequences of removing the investment allowances. Sadly out of the often hundreds of replies from the public, only one or two actually challenge them properly. Twitter is overrun by JSO, greenpeace etc who make unbelievably distorted comments that go unchallenged. I don't know if these political accounts are actually run by the MPs themselves or if it's delegated, but given the crazy possibility that Labour might actually implement these plans, the best resistance will come from people who actually know what they are talking about ie the investment community.Everyone should get a Twitter account and start bombarding these gormless politicians!

[officerdigby] 26/2/2024 16:23

Well NS producers at 75% are.

[pineapple1] 26/2/2024 16:19

Sounds like he is working for the government....lol

[squibno1] 26/2/2024 15:20

Mitch Flegg, comment

"We are pleased to have completed this transaction which creates the possibility of adding a third production hub to Serica's North Sea portfolio. As a potential domestic source of oil and gas with a low level of production emissions, a provider of quality jobs for UK workers and a generator of much needed future tax revenues, Buchan is the sort of project the UK needs as part of the energy transition."

[scepticalinvestor] 26/2/2024 08:29

This shld be up. The UK mkt is a sick, tired old dog

[monet] 26/2/2024 08:24

It's a good job we are not paying with new shares. We would be issuing nearly 20% more shares, on the agreed price in November.

[bountyhunter] 26/2/2024 07:24

Just noticed the RNS!

Acquisition of Interest in Greater Buchan Area completed.