Serica Energy Share Discussion Threads

[oilinvestoral] 02/3/2024 16:15

100% agree there Stemis! For sure the valuation isn't just about 2P, but that's the most used comparison / valuation metric they would've also taken 2C into account and dare I say even contingent & prospective resources. The deal was still overvalued based on all reasonable metrics (no matter what way you cut it)! That is beyond any reasonable doubt. You simply have to look at the basic facts:1) The guy who orchestrated the ill-fated has been sacked (allegedly against his will kicking & screaming)! 2) The assets purchased have suffered some shutdowns and underperformed!3) The share price has nearly halved if you compare it to the weeks prior to the deal. 4) the previously bullet proof balance sheet had weekend significantly and oodles of debt have been taken on! #FACTS

[stemis] 02/3/2024 14:57

The fact that 2p increased by 32% from 42mmboe at the announcement of the acquisition to 55.5mmboe in the interims just 9 months later, illustrates my point that valuation isn't just about 2p at one single point in time but also the prospectivity of the licenses.

[nigelpm] 02/3/2024 14:25

My sense is it was a very decent deal at the time with what was known then.

As things have turned out with hindsight as a short term play of course it would have been better to have kept a high net cash position and entered into a large buyback programme or returned capital to shareholders through special dividends.

[nigelpm] 02/3/2024 14:22

More likely coffee as part of the due diligence process Serica will have got closer to a 55m figure.

[coffeecanportfolio] 02/3/2024 13:56

The deal would've been in negotiations for many months may be even a year. I used the 2022 figures because it provides a fairer reflection of what Serica knew when they negotiated the terms and gives a more accurate number of what was being shaken hands on/ merits of the deal. If reserves continue to grow between now and 2027, the deal may very well turn out to be a reasonable one.

[nigelpm] 02/3/2024 13:42

Great analogy Stemis - it's a truly bizarre argument.

[nigelpm] 02/3/2024 13:41

I am still mystified why a reserves position that is 11 month old at the time of the announcement of the acquisition is seen as more reliable/accurate than one conducted a few weeks later. Genuinely interested in the logic of that.

[stemis] 02/3/2024 13:40

That's like saying that, if you paid £100 for what you thought was an empty briefcase but it turned out to contain £1,000 in cash, it was still a bad deal because you originally thought it would be empty. 55.5 mmboe of 2p is what they got for their money whether they expected it or not (and maybe they actually did expect an upgrade in 2p).

[coffeecanportfolio] 02/3/2024 13:13

To be clear, my figures are based on the deal RNS. The headline 2P reserves announced in December. I feel it would be disingenuous to use more recent upgraded reserves to justify the deal.FWIW I believe longterm the is a good one but I've double checked my numbers and I make it just under £16/bbl or $20.5/bbl!

[oilinvestoral] 02/3/2024 13:07

So you're valuing a deal on a reserves valuation that you claim still "hasn't taken place? That's all I need to knowPermanently filtered!

[nigelpm] 02/3/2024 12:18

Reserves get revalued on an annual basis. At the time of the December rns that revaluation hadn't taken place. It took place after year end and reported as such.

[nigelpm] 02/3/2024 10:26

Thanks stemis. Actually slightly better than I thought.

[oilinvestoral] 02/3/2024 10:10

CCPI'm not sure if you are new here but to give you some background about the Pugnacious Mendacious. His track record is literally worse than Jim Cramer! The pugnacious one turned up at SQZ in 2022 during the gas price boom armed with his trusted abacus. In hindsight that was my cue to leave (having been here since 2015). His track record in the energy sector in recent years includes buying Hurricane Energy at 60p , Cairn Energy at 240p and soco international at 400p +! Watch him claim otherwise and deny it ! His posts are still there for all to see! lolThe company where most of us made life changing money in recent years in the oil sector (Rockrose Energy), was one he continually & incessantly de-ramped on Twitter until it was taken over ! Unbelievable! In non oil and gas companies he was recently seen pumping POLX! I kid you not! So be careful before you start listening to his ilk or taking any investment advice based on his years of untold wisdom!

[oilinvestoral] 02/3/2024 10:04

Also one other thing, the 2022 end of year reserves figures came out in 2023 in Q2. But you know that don't you... Why stop there though? Why not wait until the 2023 reserves are audited and use those figure to make the calculation even more favourable? Only 6 weeks to go and we can all claim that SQZ purchased TW for £7-8/ bbl !

[oilinvestoral] 02/3/2024 09:57

Morning Stemis I really do respect you so I'll be kind. First of all, the PM has never been "right" about anything in his life!!What happened to the cash that Mercuria were given or does the price paid only include shares and debt taken on ??2P reserves on slide 6 of the deal presentation shows that tailwind brought to the table around 40 million! Check the slide deck! Don't know why anyone would use later figure! That was what they negotiated based on!Regardless of what we all think, the market has spoken! The shares are now worth less than the cash in the bank that we had at the time! share price on the day before the deal was near 300p! Today it is 177p! All the number crunching 2 years later is lipstick on a piggy! nuff said!

[oilinvestoral] 02/3/2024 08:58

Oh dear CCP!!Initially in post 5711 he claimed that they were purchased at £14/ bbl. He then edited that post and changed the figures! In post 5713 he claimed that they were purchased at £12/ bbl In post 5722 he then checked his calculations and claimed that they were actually purchased at £11.55/ bbl Does anyone else see a theme here ? Soon he's going to claim that SQZ were given money to take on Tailwind!!! LOLZEven if he uses the 2023 figures (that never came out until Tailwind was part of the SQZ group), his calculation is still wrong!So let me get this straight if Ganett reserves increase next year is going to claim the purchase was made at an even lower price ? He likes to argue for the sake of arguing! I say just filter him and enjoy your weekend!

[coffeecanportfolio] 02/3/2024 08:53

Nigel, I think you are using the 2023 figures that came out after Tailwind became part of the Serica Group (not the 2022 figures that TW was purchased on the basis of). I have proven & probable reserves at the time of the deal are £15.5-16/ bbl (approximately $19.5- $20.3/bbl)

[nigelpm] 02/3/2024 08:31

I'll take that as a no then. :)

[oilinvestoral] 02/3/2024 08:08

If you weren't so much of a * unt with a capital "C" , I would actually send you my SQZ spreadsheet that I use for hundreds oil investment related calcs ! Unfortunately your ultra pugnaciousness makes you extremely unlikeable! Anyway, that's you back on filter ! Please combust quietly ! If you do behave yourself I might give you a reprieve! But you need to be on best behaviour! LOLZ!!

[oilinvestoral] 02/3/2024 08:04

The Pugnacious Mendacious: "Tell me where I'm going wrong"------------------Oh dear oh dear oh dear There's so much wrong that it's easier to tell you where you're going right!!! The 641m is WRONG!!! The 55.5 mmboe is WRONG! Couldn't be bothered reading the rest of the guff!!! Top tip: when you are doing division you need both the denominator & numerator to be correct in order to achieve the right answers! LOLZBut I'll tell ya what at least you referred to the reserves using their correct terminology and not named them after an American thriller film this time! LOLZ Your pugnaciousness precludes from the most the basic comprehension skills, understanding written words and using a calculator! Back on filter !!! I'm off to enjoy my weekend!! Ciao