Serica Energy Share Discussion Threads

[joestalin] 06/3/2018 14:01

Not insight - just stating the bleedin' obvious.

[fardels bear] 06/3/2018 11:01

Joe Stalin, it's been drifting sideways for some weeks now, thanks for your insight.

[joestalin] 05/3/2018 13:59

Never trust a candle.

This will either be news driven or it will drift sideways.

[chestnuts] 05/3/2018 12:40

Todays candle is very bullish so far

[dunderheed] 05/3/2018 09:49

Has anyone* 'heard' anything interesting 're Lomond blockage yet?!









* almvisi lol!

[farmscan] 05/3/2018 09:26

Still got Rowallan drill and Columbus news (hopefully) this year.

[farmscan] 05/3/2018 09:21

Found it. Thanks pineapple.

[pineapple1] 05/3/2018 09:06

Sometime in Q3 in last Ops update end of Jan.

[dcarn] 05/3/2018 09:05

I'd be surprised if there were any further deals this year, too much going on and they need to bed in the BKR, but then again if BP want rid, who are we to say no. Perhaps a Namibia farm in should Tullow or CHAR hit the sweet spot. Likewise not selling anything until at least 2021 to reap the full benefits.

[farmscan] 05/3/2018 08:29

chestnuts. Has BKR completion been 'pushed back'? I dont remember seeing anything other than 'mid 2018' mentioned.

[nicnic1953] 05/3/2018 00:52

Absolutely correct we arè in a good position here we don't need dividend chasers ! either let the company grow who knows what Tony walker pulls out of the bag this year ? He did surprise us last year !! I'm looking forward to another surprise !! I'm here to minion 2021

[fardels bear] 04/3/2018 20:47

We don't want it all extracted though before the BP. Share falls to nil in 2021... That wouldn't do us any food at all, unless you think there are going to be other assets that can be picked up cheaply.My fave would be to buy the IOC share of Rhum.

[chestnuts] 04/3/2018 20:24

What i was going to say , it looks like rhum 3 will be drilled before completion and this could be in the small print thats why the date of completion of BKR as been pushed back a tad.

[dunderheed] 04/3/2018 18:55

What was chesty 'saying'?

[fardels bear] 04/3/2018 17:02

C'mon, get it off your chesty... Unless you've bought a pram too...

[gersemi] 04/3/2018 09:54

Serica Energy (LSE:SQZ)

This stock pick is a continuation of our previous article, which can be viewed here. In the previous CJ Exposure report, the various up-and-coming production lines were detailed, showing where the company’s future revenue will be coming from. Since the report, Serica announced that they were set to acquire assets from BP in the North Sea, which would further bolster their future revenue streams. The share price rocketed from 27p to settle around 80p over the weeks after the announcement, taking the market cap from £80m to £215m, after a period where the shares were suspended from trading. Now, at 75p per share, Serica presents a buying opportunity and although this is a lot higher than the 27p entry point from our previous article, we still believe there is more growth on offer. The re-rating reflects the BP acquisition, where the company have managed to make the deal without compromising their balance sheet and without taking on any debt, which leaves Serica in the same fantastic financial position that they had been in previously, and therefore our thesis still stands they will continue to go out and grow the business, organically and in-organically, and push for further share price re-rating.



The acquisition involves Serica purchasing BP's interests in the Bruce (36%) Keith (35%) and Rhum (50%) fields with Serica assuming operating interest of all three fields. Serica have described this move as transformational and it's hard to disagree; the new fields increase net production from 3,000boepd (Barrels of Energy per day) to an estimated 21,000boepd (7x) and a sixteen-fold increase in net reserves to 50mmboe from 3mmboe. Not only will it significantly improve Serica’s cashflow, but it also diversifies the company away from the problematic forties pipeline; previously the pipeline had been Serica’s only export source and had suffered blockages which would weigh heavily on their share price, but with a more diversified export system, and less reliance on one pipeline, a temporary shutdown wouldn't hurt Serica like it has done in the past.

The deal will initially cost £12.8m and then a profit-sharing deal with BP on future production from Bruce, Keith and Rhum will be paid. BP also assume 100% of decommissioning costs assuming no new facilities are installed by Serica after completion, and with this earn-out structure in place it appears to be somewhat of a win-win for both parties, as they share both risks and future profits. The deal is expected to complete by mid-2018, with Serica taking on all of the BP employees working over the three assets, which could help with some of the short-term teething issues as Serica move from being a single asset producer to being operational over multiple assets. We are less concerned by any teething issues as our preference for Serica shares is based on a longer-term view, where we see Serica becoming a leading British independent oil and gas company, and in this regard, we still see there being a lot of upside on the price that is already up c.200% in the last 12 months. Peel Hunt have set a target price of 110p, which offers upside of c.38% from current levels, but we believe that this will prove conservative in the longer term.



On a larger scale, we don’t believe that a 75p share price reflects the potential of Serica Energy. The new assets will be producing first oil to Serica in the coming months, but it’s also worth reflecting on our previous article, where we detailed the other projects planned to come on-stream in the next few years (including the Columbus and Rowellen fields), which we believe means that Serica will become a major player in the North Sea and could offer significate upside against risk. Serica also looks appealing on current valuations; trading with a P/E of only 3x and a PEG of 0.04x; this look very attractive, especially when considering shares in the company have risen by over 400% since January 2017. In particular, a PEG of 0.04 implies that Serica shares are still yet to price in almost the entirety of the company’s forecasted growth. It is for exactly this reason, the forecasted growth that Serica offers, partnered with one of the lowest PEG’s that you will find, that warrants its place in our top stock picks for 2018.

[chestnuts] 04/3/2018 09:19

Been thinking about rhum 3 and all my calculations are based on the same production as rhum 1 and 2 13000 boepd but realisticly i think in it self it could be up in to the early teens as the other 2 wells have been producing for some yrs, this is why BP have put a penalty of up tp $16m payable next Jan,
So after Rhum 3 we could in total be producing around 28kboepd or around 12kboepd net to serica.2018 or 14k net 2019

[nigelpm] 02/3/2018 18:50

Wow - will be looking to start building a stake again here - not surprised at the fall if I'm honest - any run up with a decline in the general market will have people rushing to take profits.

[dunderheed] 02/3/2018 17:09

Just imagine if we didn't have the bkr assets?! 20p?
I'm hopeful if Erskine back onstream in the next couple of weeks, then with bkr production upside plus oil and gas price upside hopefully should be no impact on original 2018 projections.
If I had some spare cash....

[mesquida] 02/3/2018 16:59

And the price of gas going through the roof! Ironic, is it not?

[drmaccers] 02/3/2018 16:32

What a terrible week

[fardels bear] 01/3/2018 20:48

Tis drifting a bit, you're right.