Serica Energy Share Discussion Threads

[chestnuts] 28/7/2018 15:17

As any one thought about the cash position and who would pay for what if the deal doesnt go ahead,

They had $21m at the agm
New pipe line around $5
Payment of $3m to BP for Erskin
No Income till Sept/Octoish
BKR Loan i think they had borrowed around $3m
Running costs of daily overheads $4m maybe more

That leaves around $6m end of Aug mid Sept

TCW is a very wise man he wouldnt put the company at risk for one deal, i wonder the reason he put the little snippet in about the placeing a safe gaurd and he is also wise he wouldnt go for a placing when the share price is low

What happens if the BKR deal doesnt go through, it will cost x amount to de tangle

[dunderheed] 28/7/2018 14:37

Thanks re share prices and that's great 're p&l estimates, at least you're putting head above parapet!
Tbh I haven't even thought too hard about it because if it goes through, it will be in the 'oft used and never really achieved' words, truly transformational!!
I had to sell quite a few if mine to help a mate out and to invest in another business I didn't complete on and will buy more if I can find the cash!
Best of luck all.

[general george] 28/7/2018 14:28

DH.

No didnt take the 12.8m off.

I first bought at 25p. Looking for 50p from original assets. I bought more at 22p. And then bought between 62p and 65p.

My estimate was based on past performance profits from bp and sqz documents. Nothing else.

[dunderheed] 28/7/2018 13:33

Yes guys Georgies stuff is good to go and is as good an estimate as anyone's!!
Regardless of exact p&l cash balance (did u take bp down payment off George?) this will be a quid (++) if we land this deal!!
All imho and as ever dyor.
George you're 32p average, isxthus taking into account recent purchases in low 60's. Cheers all.

[general george] 28/7/2018 12:54

Show us your working then Chesnuts....
I'm interested to see where BP and Serica have gone wrong.

I used 16.5k average production to account for shudown/maintenance.

[general george] 28/7/2018 12:53

From admission document.

'The BKR Assets being acquired comprise a 36% interest in the Bruce field, a 34.83% interest in the
Keith field, and a 50% interest in the Rhum field. With net production of approximately 5 million boe3
in 2016 the BKR Assets were significantly cash flow positive, generating an operating profit of $49.8
million before tax for the year ended 31 December 2016'

This increased a great deal in 2017 H1, see screenshot below, for ease of viewing.



Bp have stated they expect to get $400m cashflow from the 4 year deal, incl payments from Sqz. $12.8m upfront on completion and more dependant on Rhum performance.

[chestnuts] 28/7/2018 12:42

Fardel

Condensate comes at a premium to Brent its usually a couple of dollars more. When i do my workings out i use a 300 day yr allowing for breaks in production.

[general george] 28/7/2018 12:25

Chesnuts

I didn't say it didnt cost anything.

Where did I say that?

I said the from BP accounts. The 6 month profit was 72m usd. Which is a fact in writing. This covers gas and condensate.

I am not assuming anything apart from the fact the profit increases as both POO and gas price have risen considerably.

Erskine at 2k boepd resulted in 21m cash, at 3k = 32m. I was being conservative, so didnt add anything for rise in gas therm price. The 2k was actually av 41p (sqz presentation/results). So that 32m would be closer to 40m PA once bypass complete and uninterrupted production.

Show us your workings?

Mine were backed up by previous results...INCLUDING HEDGES....

Think you have painted yourself into a corner here pal....

[fardels bear] 28/7/2018 12:13

No, condy is higher value than gas. Almsivi did post some info but I think he stopped short of an actual value. I suppose if it is a fraction pegged to Brent it will move daily.

[chestnuts] 28/7/2018 12:09

Genral/Reaaly

So this hedge SQz as taken out doesnt cost any thing, and are you presuming condensate is the same price as gas.

[reallyrich] 28/7/2018 11:59

Chestnuts your also such a tool. That is the minimum price.

I hope you don't work for the Samaritans your constant doom and gloom would send them over the edge

[general george] 28/7/2018 10:32

Hedged at a floor of 32p...

I guess you don't know what that means?

BKR figures taken from BP accounts, which includes hedges.
It was profit for the 6 months period ending June 17.

Annualised $144m

Perhaps you should show your working to get an alternative view?

In any case deal completes its well over £1.

I'm invested from 32p average, have bought at 65p and below more recently.

[chestnuts] 28/7/2018 09:58

Genral
60% of BKR gas is hedged at 32p a therm,

BKR produces 85% gas 15% Condensate

Now work it out using these paramiters

[general george] 28/7/2018 09:55

Hi Chesnuts.

All there. $72m is from BP accounts. 6 months to June 17. Av therm price 41p.

Erskine taken as $32m annual profit based on 3k boepd @ 41p a therm. Obv this will be higher at 58p a therm.

But i am being Conservative, and plus its not all gas/condensate.

Just illustrating the upside.

[chestnuts] 28/7/2018 09:35

Genral

Could you Please show your working outs

[general george] 28/7/2018 09:29

Next year profit would be
$88m BKR + $32m Erskine

$120M

Valued at x3 = 360m + 100m cash

$460m = £350m = 133p

Conservative valuation, without Columbus Rowallan etc. And assuming gas price 52p per therm.
Futures pointing higher. PLUS adjustment required for 100% profit after 2021.

[general george] 28/7/2018 09:18

Gas futures looking very strong. See link.

BKR profit was $72m to BP 6 months ended june 2017. Gas price was averaging 41p a therm then.

Now it is 58p a therm. And rising strongly into the winter.

Factoring in the increase with an average of 52p (this year)profit would be $176m a year.

40% share $70m.
Then 2019 $88m, 2020 $88m, 2021 $106m. Then 2022 profit all sqz.

This is profit.

Year end this year cash would be
70 + 21 + 8 (if Erskine back sept) = $100m

Mkt cap £182m currently.

Was just bored while waiting for waiver news.....

[captainfatcat] 27/7/2018 19:49

Thanks for the heads up on that steelwatch

[farmscan] 27/7/2018 18:18

Thanks Steel, that's good news, moving forwards.

[dunderheed] 27/7/2018 18:11

Cheers steely.
Here's hoping for success!

[steelwatch] 27/7/2018 18:09

Permitting process for the Rowallan well has started and the rig is identified as jackup Ensco 121

[matt] 27/7/2018 08:21

“The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” George Bernard Shaw

[general george] 27/7/2018 08:01

The problem with Trump is he thinks he is running a reality series.
He always has to be doing something to keep it exciting.....

Who knows what will happen next?

[sawney] 27/7/2018 07:29

Can't see Rhum getting in the way of this....



...and BP offloading more stuff....

Following completion of the acquisition, BP intends to make new divestments of $5-6 billion, predominantly from the Upstream segment. The proceeds are intended to fund a share buyback programme of up to $5-6 billion over time. The divestments will be in addition to BP's ongoing programme of around $2-3 billion divestments a year.