Serica Energy Share Discussion Threads

[brucie5] 16/7/2024 17:58

yasX16 Jul '24 - 12:57 - 6691 of 6694
0 1 0
There is nil chance of this heading to 100p.
---------------------------------------------
Really?
There is always a chance.
Which is not to say that it will.
But that this is the stock market, not the department of weights and measures.

[ashkv] 16/7/2024 14:42

CEO has purchased GBP 600k at higher prices than today

From Surprised on the other forum ->

Investors Chronicle Today

No one knows a company quite as well as its directors, which is why it is worth keeping an eye on director buying and selling. New Ceo Chris Cox purchsed over £600k of SQZ shares.

Despite the energy industry’s gloom about Labour’s plans to bring in higher taxes and block new developments in the North Sea, investors are far more optimistic. Serica Energy (SQZ), one of the hardest hit by the windfall tax, was in the top-10 additions to Fidelity ISAs in June, alongside BP (BP.).

Serica itself has warned of the impact of the government’s plan to reduce tax relief for capital expenditure, which will “rapidly and terminally accelerate the decline in UK oil and gas production”, in the words of chair David Latin. But it’s not just retail shareholders who are optimistic.

“We see the market as more than discounting the impact of windfall taxes, with c.95 per cent of the current market cap generated in free cash flow across 2024-2026 at our $70 (£55) a barrel oil price forecast,” said Stifel analyst Chris Wheaton, not an advocate for Labour’s North Sea policies.

On an operational basis, 2024 has been good for Serica thus far. Production guidance has recently been reiterated at around 43,500 barrels of oil equivalent per day (boepd), after successful well campaigns at the Bruce and Guillemot fields. The company also has net cash of £121mn, providing “significant firepower” for M&A alongside its free cash flow generation, argued Investec analyst Alex Smith.

[imjustdandy] 16/7/2024 13:41

CEO has purchased 500,000 pounds worth at 1.35. Follow the money

[imjustdandy] 16/7/2024 13:38

Added here today again at 1.33

[yasx] 16/7/2024 12:57

There is nil chance of this heading to 100p.

I have substantially increased my stake around these levels.

[ashkv] 16/7/2024 12:49

Repost of this thorough analysis of SQZ from June 2024

[pjackson2] 16/7/2024 12:42

I agree a gift at a quid.
I too would double my holding.

[ashkv] 16/7/2024 12:03

52 Week Low Yesterday 15 July 2024 at 132.2p

At 100p SQZ would be trading cheaper on most metrics than shaky ground Kurdistan oilers - GKP / GENEL!!! And net cash would comprise 31% of share price!!!

SP-> 100.00p
SQZ Current Share Price vs 52 Week low of 132.2p on 15 July 24-> -24.36%
SQZ Current Share Price vs 52 Week High of 271p on 18 Sep 23-> -63.10%
Brent-> $83.80
British Gas Prices (Next Month)-> £76.00
Shares Outstanding-> 390,457,635
GBPUSD-> 1.295
MarketCap GBP-> £390,457,635
MarketCap USD-> $505,642,637
Cash GBP (26 Jun 24)-> £301,600,000
Cash USD (26 Jun 24)-> $390,572,000
Debt (GBP) (26 Jun 24)-> £182,000,000
Debt (USD) (26 Jun 24)-> $235,690,000
NET CASH (USD) (26 Jun 24)-> $154,882,000
NET CASH % of SP/Market Cap-> 30.63%
Net Cash Component of SQZ Share Price-> 30.63p
Enterprise Value (In USD)-> $350,760,637
2024 Mid-Guidance Production [2024 Guidance 41-48kbpd]-> 43,000
SQZ YTD Production [Year to 23 June 2024]-> 43,781
Production Actual 2023 [Guidance 2023 Mid-Point (40-45kbpd)]-> 40,121
Enterprise Value/Barrel 2024 Mid-Guidance Production [2024 Guidance 41-48kbpd]-> $8,157
EV/Barrel SQZ YTD Production [Year to 23 June 2024]-> $8,012
EV/Barrel Actual Average 2023 Production-> $8,743
Decommissioning Provision (Per FY 23 Results)-> $150,906,350
EV/Barrel Mid-Guidance 2024 Production including Decommissioning Provision-> $11,667
(9p+14p) 2024 Full Year Expected Dividend Yield-> 23.00%
SQZ Net Payout Yield (Dividend + Buybacks (2024 GBP 15Mn) + Special Dividends) -> 26.84%
SQZ + Tailwind 2P Reserves as of 31 Dec 23-> 140,000,000
SQZ Combined Enterprise Value/2P Reserves-> $2.51

[ashkv] 16/7/2024 11:43

100p would be a gift and would have me doubling down!!!

Key is some clarity from the Labour Government.

Also the deal the new CEO is going to announce - this is a given!!!

That he has put over half a million quid of his own after tax cash in SQZ at levels above today's share price does give me confidence that perhaps after a down dip an upswing is likely!!!

[davethehorse] 16/7/2024 10:57

100p on the cards here imo...

[creditcrunchies] 16/7/2024 07:20

Yes true this is pretty brutal going from a 450p takeover to pretty much 100p now shareholder value destroyed. They obviously took their eye off of the ball so how on earth is this company going to fix this mess is the question?

[ashkv] 15/7/2024 11:20

Crazy what destruction Mitch Flegg has inflicted on this share - now nearly half the net cash value prior to disastrous epic debacle deal for Tailwind.

Any board member that remains and voted for this travesty should be sacked!!! Mitch Flegg should be sued for his lapse of fiduciary oversight!!!

[ashkv] 15/7/2024 11:18

From Surprised on the other forum ->

Investors Chronicle Today

No one knows a company quite as well as its directors, which is why it is worth keeping an eye on director buying and selling. New Ceo Chris Cox purchsed over £600k of SQZ shares.

Despite the energy industry’s gloom about Labour’s plans to bring in higher taxes and block new developments in the North Sea, investors are far more optimistic. Serica Energy (SQZ), one of the hardest hit by the windfall tax, was in the top-10 additions to Fidelity ISAs in June, alongside BP (BP.).

Serica itself has warned of the impact of the government’s plan to reduce tax relief for capital expenditure, which will “rapidly and terminally accelerate the decline in UK oil and gas production”, in the words of chair David Latin. But it’s not just retail shareholders who are optimistic.

“We see the market as more than discounting the impact of windfall taxes, with c.95 per cent of the current market cap generated in free cash flow across 2024-2026 at our $70 (£55) a barrel oil price forecast,” said Stifel analyst Chris Wheaton, not an advocate for Labour’s North Sea policies.

On an operational basis, 2024 has been good for Serica thus far. Production guidance has recently been reiterated at around 43,500 barrels of oil equivalent per day (boepd), after successful well campaigns at the Bruce and Guillemot fields. The company also has net cash of £121mn, providing “significant firepower” for M&A alongside its free cash flow generation, argued Investec analyst Alex Smith.

[fandagle] 15/7/2024 08:57

The Boffins have been trying to refine Hydrogen as a fuel for almost 250 years and aren't much further forward, we are at the start of the renewables revolution and that will take another 100 years to sort out, believe me Hydrocarbons will be like Gold when they realise how much a fustercluck they have made of this debacle...

[spawny100] 14/7/2024 13:13

6679 I think it's madness to let our N Sea assets fade away over any time period. If oil and gas energy is completely withdrawn from the equation we'll see the Emperor with no clothes on; there is simply no way renewables can stand on their own two feet unsupported.

[slicethepie] 14/7/2024 12:39

Millibands political role includes energy security yet his stupid ideas risk us being even more dependant on overseas oil and gas. We have already witnessed a higher rise in electricity prices than the whole of Europe our only hope is some sensible colleagues quash his flat earth ideas. We need to invest in gas storage as a starter

[high noon] 14/7/2024 11:45

Thought provoking article in the Sunday Times business section regarding cost to taxpayer if decommissioning of NS platforms is actioned in accordance with Milliband plan. Writer suggests Rachel Reeves will fight hard for a cost effective transition period.
Hopefully common sense will prevail and our North sea assets will fade away over a sensible time period.

[97peter] 14/7/2024 11:00

Serica should merge and buyout Enquest - Great partnership

A merger and acquisitions with Enquest would bring together two great companies with cash assets, oil and gas wells outside UK and both well run and generating good growth and cash flows, share price rises!!!

[kenmitch] 12/7/2024 17:15

Hi Brucie.

I’m confident in continuing to hold Serica and agree with you that Labour will see sense once faced with the reality of the dire costs to the UK in lost jobs, lost revenues and lost tax if they stop all further UK drilling and exploration and destroy the UK North Sea oil industry.

A lot of manifesto and election policies and promises get quietly ditched and this is very likely to be one of them, along with the idiotic pledge to revert to the 2030 date too.

Note these comments from the recent Serica trading update:-

1. Oil and gas accounts for 74% of UK primary energy consumption………and strong demand for oil and gas will apply for decades to come.

2. UK uses twice as much oil and gas as it produces.

So surely Milliband will be made to see sense? Why import oil and gas at great cost when we have our own supplies on our doorstep?

All this stupidity is already priced in to shares like Serica. And IF I’m wrong and stupidity wins then note this final section from the recent trading update. Serica is well prepared for the stupidity of too many of our politicians and will adjust accordingly. (And fwiw I think there’s a good chance the dividend will be held too).

Here’s that final section from the trading update:-

“And yet, notwithstanding all the headwinds we face in the UK, I am optimistic for Serica's future.

Over just a few years Serica has been transformed from a small international exploration focussed company into one of the top 10 producers in the UK North Sea, safely and responsibly operating complex facilities offshore and growing its 2P reserves some 35 times since the beginning of 2015. To deliver these achievements we have navigated operational challenges, oil and gas prices hitting historic lows - remember gas prices of 10 pence a therm in May 2020 - and pulled off multiple good acquisitions. With the assets, financial strength, staff and leadership now in place, we have a very solid platform for entering the next phase of growth.

I hope that the circumstances will allow us to keep investing in our existing portfolio for many years to come. If necessary, however, we will adjust our strategy to protect shareholder value. In any event, be assured that we will continue to be diligent in delivering the most we can from our existing assets and to search out new value accretive opportunities, whether they be in the UK or overseas.”

[bountyhunter] 12/7/2024 12:36

I'll second that on MT's posts elsewhere which are always well considered and certainly astute.

[brucie5] 12/7/2024 12:15

MT, I'm more interested in hearing your views on SQZ, tbh. I'm sure they are astute, having followed you on SBLK.
I doubt very much if this bb will have any influence on Labour policy wrt the North Sea, though I do expect them to be more pragmatic than many fear.
For the record, I agree that we will need oil for many years into the future, to support the energy transition; and the NS is worth supporting both for jobs and our own energy security.
Question for investors is more to do with the risk balance; I have taken the CEO's large buys as a positive signal and have upped my position accordingly to a regular 2.5% of my folio. The current dividend level is egregious and I wonder what your views are on where this is likely to go to - or how far down, as i presume it can go no further up, nor probably stay the same?

[mount teide] 12/7/2024 10:28

The hugely expensive and completely unaffordable madness of Net Zero 2050

Despite the West spending US$5.1 trillion to date on 'renewables', "Clean energy is still not even meeting the entirety of demand growth,” says Nick Wayth, chief executive of the London-based Energy Institute. “Arguably, the energy transition has not even started.”

Global upstream oil and gas capex is expected to grow by $24 billion this year, surpassing $600 billion for the first time in a decade. Annual investment will need to grow by another $135 billion, or 22%, to $738 billion by 2030 to ensure adequate supply, according to a new report issued this week by the International Energy Forum and S&P Global, two organisations with an enviable track record for the accuracy of their oil demand forecasts.

Labour's energy policy is an incredibly serious national security risk as well as economic lunacy. We will be forced to buy oil and gas from potential enemies, funding their regimes and further bankrupting ourselves. An act of pure self harm ...... authoritarian, woke, virtue signalling, grievance politics was clearly still in its infancy under the last Government's socialist policies - now the Masters of the art are back in power!

Twenty seven years of largely unbroken centre left governments - it's a wonder we still exist and once the ideological lunacy of net zero and open borders accelerates under Sir Kneeler, there is a very high chance the nation will be driven into long term penury and consigned permanently to third world status.

Ultra low productivity in the public sector, record and still increasing taxes, constantly falling quality of life and a hugely self-entitled civil service and local government officers, over 50% of households net recipients of government largesse and a diminishing number of net taxpayers, 10% of whom now contribute over 70% of all income tax raised.......we need a private sector taxpayers party, to take a chainsaw to all of this.

As youngsters, we expected that if we worked hard, we would be able to afford a home and sustain a life of quiet comfort and dignity for ourselves and our children. But governments have not delivered what we voted for, and forced upon us many policies that we have never had the chance to vote upon.

Democracy, it turns out, is a chimera. The steady improvements in life that we expected have not materialised.

Instead we have a broken NHS, the BBC is a left-wing propaganda machine, housing and social services are overwhelmed by mass immigration, the left wing EU obsessed civil service is pursuing its own woke 'progressive' agenda, the armed forces are underfunded while the social security system rewards the idleness of millions, there are too few dentists, roads are strewn with car breaking potholes and endless speed camera's, the police are more concerned with hate crimes than burglars and shoplifters, rivers and beaches are polluted with sewage, and we have sky-high tax and energy bills.

No wonder people are depressed and angry. Yet we have a Prime Minister and most opposition parties incapable of speaking up for the moderate majority, who still have pride in their country and are desperate for strong leadership and guidance through the current immigration, energy and financial crisis.

This vacuum is dangerous. As there is now a brand of politician in the Labour Party whose ambition and reason for entering politics, seems to be to change the way other people think, to coerce them into believing in the same principles as they do. And they see the police, the courts, the prison system, public sector, NHS, schools and universities as the mechanisms through which this change can be brought about.

They claim to be champions of diversity, but beyond skin colour and gender preference, genuine diversity is anathema to them, because they think diversity of thought is undesirable.

The problem is that the three legacy political parties are almost identical politically and no longer believe in democracy, preferring to control the population rather than represent it.

[kibes] 12/7/2024 08:20

With crazy policies on unlimited migration, shutdown of the North Sea, other Net Zero insanity and preventing landlords from selling properties or increasing rent I am just wondering which will collapse first - the country or the Labour Government. This may all blow up in their faces quite quickly within a year when the Budget begins to suffer extreme damage from loss of income coupled with higher costs.

[nigelpm] 11/7/2024 19:28

They will certainly live to regret this insanity. Agree with stemis on allowances not being loopholes but we'll see how they deal with that. I suspect a lot of law suits incoming.

[yasx] 11/7/2024 19:23

The Labour Govt (via the ghastly Rayner) has today also decided it will not be opposing a challenge to the opening of the mine from climate activists - the opening of the aforesaid mine is now effectively moribund.

Days of darkness and inadequate energy are almost certain in due course - and they have barely started their plans which are likely to become increasingly more aggressive.