Serica Energy Share Discussion Threads

[ashkv] 01/4/2024 17:01

Flegg A Bad Egg Who On Tailwind Negs!

Flegg Hurry Off The Plank Back To The Deep Dregs!

[nigelpm] 01/4/2024 15:44

Agreed. So very boring and monotonous and worst of all full of errors.

[mrscruff] 01/4/2024 09:54

Are we incapable of moving on and looking at SQZ through the lens of 188p and a dividend yield of over 12%. In the same way you can't buy past returns then you cant avoid past losses either.

[oilinvestoral] 29/3/2024 18:34

"I want to clarify that I am not condoning the price SQZ paid for Tailwind;"--------Sounds like someone agrees with me but wanted to argue the toss for the sake of it ... Have a nice day

[oilinvestoral] 29/3/2024 18:24

"Also, gross profit per barrel is not relevant when most of it is taxed away."--------Hunter Who mentioned anything about gross profit per bbl ????Also not claiming to be an oil guru! But would certainly put my oil knowledge against any of the pugnacious bulletin board experts who were calling reserves p2!

[oilinvestoral] 29/3/2024 18:22

There's more than 1 way to skin a cat! A very common valuation metric is dollars per flowing bbl. In my experience:$ 20,000- 25,000 / bbl the buyer got a good deal.25k-30k is going rate fair value.Anything above $35k/bbl and the seller is laughing all the way to the bank. I agree though that 2P is more common among non-industry participants! When you add decom liabilities we were fleeced based on every single metric known to man! Enough about 2P though, the accountant on here was calling it P2 a couple of weeks ago but yet wants to argue the toss...

[hunter154] 29/3/2024 13:22

For an oil guru you seem to be missing the main point.
Oil producers are valued on 2P reserves and not current production.

Also, gross profit per barrel is not relevant when most of it is taxed away.
SQZ have reduced their tax from 76% to 55%, due to their acquisition, so this is not a linear/ binary evaluation.

To stop the self-proclaimed Oil guru from boring us with another long essay, I want to clarify that I am not condoning the price SQZ paid for Tailwind; just providing a different view point from the Guru.

[oilinvestoral] 29/3/2024 10:51

Another metric I've used in my sector to value previous oil M&A I was involved in! Now this might be a new one for the pugnacious accountant ... it's dollars per flowing barrel. You simply see how much production was in the last quarter for the acquired company and you divide that figure by the EV announced on the date of the acquisition! Not some future date as production may increase or decrease in future! On a per flowing bbl basis:Ithaca are paying around $26,000/ flowing bbl Wait for it .......We paid over $43,000 / flowing bbl Just to be kind to SQZ, I've ignored the ginormous decommissioning liability we took on!

[oilinvestoral] 29/3/2024 10:33

Hate to break to the deluded Pugnacious Mendacious one! Ithaca didn't "overpay"! They got more than double the production and more than double the 2P reserves for a lower price than us! I know you are as good an accountant as you are an investor but paying 10/bbl is better than paying 20!!!Also none of the happy clappers have been able to answer the question about why they haven't included the decommissioning liabilities of tailwind in their EV calculations! Stick to political one liners on Twitter ! You are terrible at this investing in oil malarkey!No back on filter you ignoramus!

[hunter154] 29/3/2024 03:55

Quick question. Does tax losses help offeet corporation tax only or does it also reduce EPL.

[nigelpm] 28/3/2024 21:25

Decent finish today - interesting to see ITH overpaying (or should be in the eyes of some on here) around $10 per boe. Value of tax losses ($2b worth) starting to pay dividend for Enquest now. Another great value NS equity.

[oilinvestoral] 28/3/2024 16:18

Winner winner chicken dinner! Not only do Ithaca shareholders get 7% or so divi, they also "reduce" the cost of their acquisition according to our esteemed resident accountants.... Anyone else see how ludicrous that notion seems?

[hunter154] 28/3/2024 12:27

Hey Lonrho - So there was a simple answer.

[lonrho] 28/3/2024 12:11

Ithaca is ex dividend this morning.

[oilinvestoral] 28/3/2024 10:44

Ithaca shares are down 8% this morning. Does that mean the acquisition of ENI UK is now 8% cheaper? No because that would be illogical lunacy ! It just means that some of the market participants / shareholders weren't fully sold on the merits of this acquisition!Yet the above logic is the same financial engineering that was used to pretend that SQZ bagged a bargain by issuing confetti to Tailwind PE owners!Call me old fashioned but I prefer my companies to gap up in price after the announcement of an acquisition not go down to kid myself that I got a bargain! I still believe ENI UK is many times better than Tailwind! Good examples of value enhancing oil acquisitions I've been involved in the past AET buying Angolan assets 2022-2023RRE buying Marathon 2019SQZ deals between 2015-2017

[oilinvestoral] 27/3/2024 16:16

It wasn't Iona Energy. Iona made some clangers but the good thing they did was ensure that all payments were in instalments paid into the future. The collapse in oil price and the financial difficulties they encountered meant they never ended up making the majority of the payments. I don't recall Iona paying that much. Fun fact: we now own the Iona energy assets because Decipher Energy bought the Iona energy assets from the administrator & Atlantic petroleum, Tailwind bought Decipher Energy and we (SQZ) paid an egregious amount allegedly for some tax losses that Tailwind had...

[lonrho] 27/3/2024 15:31

oilinvestor

That wasn't Iona Energy was it, i remember them paying 37 dollars a barrel for north sea production, oil price collapsed and they went bust in 2016.

[mariopeter] 27/3/2024 14:59

Thing is Stemis you will see dividend growth (Mercuria will make damn sure of that) but Oilinvestor knows that Mercuria will have all the cream. KIST was the company for SQZ although I hold neither cause Government will have too much of any profit, cream or no cream. Watch how Mercuria sell more assets to SQZ with cash ripped out of them like Tailwind. Can't see existing management shaking Mercuria. If Mercuria sell SQZ you should too cause that will be top dollar but that will not be for a few years.

I liken SQZ to a beast with a lion chewing it but being very careful not to kill it. One day the lion will stich up the beast , give it a kick and it will look normal. The lion will sell the beast after applying makeup. Tell me what happens the beast after that. (one kidney, a heart, a small brain, half a stomach and cosmetic fat).

Flegg felt Mercuria were going to bring some good deals but Mercuria will keep all the good ones for themselves cause they are ferociously greedy and will bung off skeletons to SQZ.

[oilinvestoral] 27/3/2024 11:07

Also just for the accountants (other than EV/2P) there's another metric that we use in my industry to price & judge acquisitions! It's callled EV / flowing bbl (self explanatory but if any of the bean counters need an explanation let me know).Does any accountant want to calculate how much we paid Tailwind in terms of EV / flowing bbls? The good thing about flowing barrels is that they are not subject to annual CPRs (unlike reserves)! Therefore more difficult to move the goalposts and change the dates etc! I won't hold my breath for an accountant calculating this as it was an egregious amount that our Fleggy defenders don't want you to know about ! One of the highest I've personally come across! I believe only 1 North Sea company made a worse deal a while ago!

[oilinvestoral] 27/3/2024 11:00

How much tax has been saved by all those amazing tax losses that have destroyed our previously bullet proof balance sheet! When I said it was better than tailwind it was based on:1) It provides significant scale (double the production and 2P of tailwind)2) it wasn't purchased from private equity! 3) it doesn't come with mountains of PE loaded debt ! Comprehende?I still stand by that! So are you going to recalculate the acquisition cost or not in a few months (just like you did for SQZ lol)! Call me old fashioned but I prefer my shares to rise after an acquisition announcement! Not fall in order to artificially justify the egregious price paid!

[stemis] 27/3/2024 10:47

I'm merely responding to those who says it's just the sort of deal SQZ should have done. Funny, when I posted the actual numbers, suddenly it's too early to know. Certainly it's a bigger deal than Tailwind but it costs more and potential involves a lot more dilution, at quite a depressed share price (over 40% lower than it's listing price just over 16 months ago) and comes with no losses. Perhaps you need to borrow my 'abacus'...

[oilinvestoral] 27/3/2024 10:20

Aren't we going to wait until the deal closes in many moths time? Just like you did with SQZ? What if the Ithaca share price falls to 100p? Or 70p?Also what if they upgrade reserves later in the year ? Or next year ? Using your abacus Calculate how much they would've paid please ! That's the twisted logic you used to justify tailwind after all...

[oilinvestoral] 27/3/2024 10:16

The 38% of the issued share count is just indicative! It's subject to further DD and further negotiations. But if they manage to secure it it's a brilliant offer! Given the choice, I certainly know between ENI UK & Tailwind which one I would choose! You obviously disagree lol! People are saying it's good because:1) It provides significant scale (double the production and 2P of tailwind)2) it wasn't purchased from private equity! 3) it doesn't come with mountains of PE loaded debt ! Comprehende?

[stemis] 27/3/2024 10:10

First of all that’s not true! The financial details are still to be fully agreed (as per the RNS)!

So why are people coming on here claiming it's a great deal. Actually what the announcement says is

Eni will contribute its UK business in exchange for the issuance of new Ithaca Energy shares to Eni, with Eni anticipated to hold between 38% and 39% of the enlarged issued share capital of Ithaca Energy following completion

39% amounts to 649m new shares to add to the 1,014m shares currently in issue. I'll do the maths for you; 649/(1014+649) = 39%. Current share price 146p. 649m x 146p = £950m.