Serica Energy Share Discussion Threads

[wallywoo] 02/5/2024 15:53

You see this situation again and again in the oil sector. Many stocks are super cheap.


Imho, this has more to do with the investment funds and institutions than it does with the value of the stocks themselves. It has become deeply politically incorrect to be invested in the sector. Many of these funds don't want the reputation damage of not being green. They can get away with BP and Shell perhaps (who have green stripes) but not the pure oil and gas producer's.


Of course, the world still consumes plenty of oil and gas which is unlikely to change anytime soon. The added tax by the government makes no difference to the environment, but does support a huge UK borrowing requirement!!

I think the pi can benefit here by trading these stocks in ISAs and SIPPs. The income is tax free, and the stock will trade a range (albeit at a low valuation). Just my take. Picked some up today at 180.5. With a bit of luck I will benefit from the dividend at the end of June and hopefully the current drilling will be successful and the production expectations will increase. The current share buybacks and cash rich nature of sqz, adds to the liklihood of this being a good trade imo.

[undervaluedassets] 02/5/2024 13:56

Melton ... you are a gentleman.

(I get stuff wrong all the time and find it hard to apologise ... esp with my wife which is always a mistake.)

So you sir, are a cut above.

[melton john] 02/5/2024 13:04

Sorry, you're right.

[weemonkey] 02/5/2024 12:32

George Soros used to say, contrary to the popular take that the "market is always right", that the market was always wrong. And that shares are always too cheap or too expensive. this makes sense to me otherwise prices would be a lot more static than they are.

What investors have to do is decide "what kind of wrong" they are dealing with.

At the moment market action is telling us that the price is too high for this stock and that the downtrend is correct and that there is something investors have missed.

The fundamentals seem to say price is wrong and that this is selling far too cheaply.

which is right?

We will see.

[undervaluedassets] 02/5/2024 11:10

Melton.. revisit your maths please

18 x 450% is 81 add back the original 18 is 99. (not 103 obv.. these were roughed out numbers)

Anyway ring the company and ask if they think they are undervalued or not.

Recent substantial director buying tells the story.

[fenners66] 02/5/2024 10:56

Still an argument being made that the oil price will accelerate in the future and a hedge against that would be to hold some producing oil companies.

[fenners66] 02/5/2024 10:54

I looked at these for the first time after results and then the share price went up.
Meaning that the financials were fine and market was happy to buy and rate higher.
Its the sentiment that has changed given the Deltic news.
When sentiment changes it seems to me the professionals let it take over for a while , they can sell and always buy back cheaper lower down, especially with smaller companies , but where the financials are genuine the sentiment will turn back to those in time.

[melton john] 02/5/2024 10:48

"So actually the results from 2018 showed at £18 million profit.. so £103 million post tax now signifies an increase of profits of more than 450%"

The point meannreverter is making is that a doubling of profit is a 100% increase tripling is 200% so 4.5 times is a 350% increase. INCREASE compared to ORIGINAL is 3.5 times.

[meanreverter] 02/5/2024 10:44

undervaluedassets: Sorry, I overlooked the change of currency. Anyway, the market now values Serica, on the basis of its post-tax earnings, at a multiple of 7. This seems low. Perhaps the fear is that Labour will rack taxes up to an even more crippling level.

[undervaluedassets] 02/5/2024 10:27

Perhaps it is better to quote operating profits:-

In 2018 operating profits were $ 9 million dollars (£6.42 million)

In 2024 operating profits were £321 million pounds.

And over that period the share price has gone from £1.40 to £1.80.

Anyway, whichever way you slice it the point is made.. The undervaluation here is striking even in this high tax environment.

The point I am making is this has gone from a non-producing minnow to a significant mid-size producer without a commensurate raise in the rating.

Trust me ..Other parties will be running their sliderules over SQZ .

[undervaluedassets] 02/5/2024 10:01

meanreverter, for whatever reason the profits for 2018 were listed by the company in dollars, not Sterling.

on the date in question there were 1.4 dollars to the £.

So actually the results from 2018 showed at £18 million profit.. so £103 million post tax now signifies an increase of profits of more than 450%

(I put the 2018 profits down in $$ as I quoted verbatim what the Serica did when it reported on 17/04/19.)..

[meanreverter] 02/5/2024 09:49

103 is (approximately) 300% more than 25.2 — not 400%.

[undervaluedassets] 02/5/2024 09:15

On 17/04/19 Serica announced final results for 2018 with pre tax profits of 25.2 million dollars (dollars mark you). The share price was £1.40 on that day

Pre-tax profits for the full year a few days ago were £305 million and the share price is now £1.80

"Yeah, but the UK tax situation".. Yeah, I know, I get it.

But even after the ridiculous taxes of £202 million 2023 profits are £103 million.. 400% more than the profit in 2018

But the share price has moved a paltry 30% since that time.

(NTAV has also gone from £131 million to £635 million over the period)

The word "Undervalued" does not adequately cover the situation here.

I would suggest that if British investors do not appreciate what they have; then, as seems to be the trend with UK market, it will be taken from them by grateful foreign hands. And once again UK investors will get a few pieces of silver and foreign hands will get the value that the UK's collective indifference and idiocy has created.

You don't know what you got till it's gone.

[kibes] 01/5/2024 16:04

Sbb1x - Since when has a buyback done anything for a company's share price? Shell and BP have been buying back on and off for 25 years and their shares have gone nowhere over that period.

[waterloo01] 01/5/2024 16:04

From the Deltec release. Strikes me that that's SQZ's sweet spot around the hubs.

Given the impact of fiscal and political uncertainty on investment decisions we have seen a shift away from investment in larger standalone projects, like Pensacola, towards more affordable, lower risk opportunities which defer decommissioning or increase infrastructure life such as Selene, and the Company's Syros prospect in the Central North Sea, where we have seen an enhanced level of interest.

[undervaluedassets] 01/5/2024 14:25

Er..41,000 barrels per day I think...not per year.

I think that shareholders should calm down.

Serica will make the right decisions for Serica and shareholders DESPITE the Uk government. Fxxk the UK government

Results were commendable and Serica will look to operate in other places. They have in the past and they will again.

[sbb1x] 01/5/2024 14:22

Think dividend should have been 7p and had a bigger buyback

[squibno1] 01/5/2024 12:57

When will the British Government react to industry concerns ?-

"Serica Energy is one of Britain’s top ten oil and gas producers, which delivers around 41,000 barrels of oil a year.
Its portfolio of new projects includes the Buchan redevelopment – 120 miles north-east of Aberdeen – the third-biggest underdeveloped field in UK waters behind Rosebank and Cambo.
Its chairman and acting chief executive is David Latin, an industry veteran with more than 30 years of experience working in the upstream sector including senior roles at BP and the multinational oil giant, OMV Group, where he headed its Norwegian operations.
In other words, he knows his onions.
Which is why when Latin warns that the Government’s insane tax war on oil and gas producers is driving Serica to look at new investments elsewhere in the North Sea – such as Norway – we should shudder. And possibly weep.
The incongruity is too much to bear: the fact that Britain’s penal tax regime might force a British oil producer to go to the land of the oil-rich Vikings to explore for energy when we still have our own black gold is absurd.
Yet that is the state of play which Latin is warning about, not just for Serica but other UK oil producers.
If Serica and its peers do go elsewhere, so will the UK jobs, the tax revenues and more critically, energy security.
Why, you have to ask, would any government willingly penalise its oil producers after the energy shock triggered by Russia’s war on Ukraine, sending oil and gas prices soaring and inflation rocketing?
Quite rightly Latin points the finger at Westminster – rather than Moscow – for the trouble facing the sector."

[nigelpm] 01/5/2024 08:07

I suspect they have daily limits and clearly yesterday with much bigger volume from sellers they were able to fill in the morning

[slicethepie] 01/5/2024 08:04

Obviously they only buyback in the morning, asleep in the afternoon when the shares were 12p lower. Money making scheme for the broker!

[nigelpm] 30/4/2024 22:21

Nice spot - soon get through the £15m at this rate ;-)

[croasdalelfc] 30/4/2024 20:07

188000 today judging by the late TVR RNS

[creditcrunchies] 30/4/2024 19:39

They need a strategy to get out of the UK just like the big oilers have. Your Shell, BP, Total get their revenue outside to avoid the taxes. UK need massive quantities of oil and gas they will do for decades so they should position themselves to be importers of the stuff avoiding the tax

[spawny100] 30/4/2024 19:05

Drop today probably due to Petrofac shares being suspended as from tomorrow? Just saw someone mention on the other site.

[upomega] 30/4/2024 19:02

I agree mrscruff. I would go further cut the dividend to two pence per year.Hopefully hmg will also tax north sea o and gas further. Then we will show the world what a powerful and thoughtful nation we are in terms of the climate