Serica Energy Share Discussion Threads

[dunderheed] 03/10/2018 19:08

They're not changing equipment sub sea.
The problem is the division of liabilities from an insurance perspective of 'non us company personnel' maintained equipment were to fail.
The us company will just say not our problem we didnt maintain and the maintenance company will always say 'yes we are maintaining it but if anything goes wrong the liability rests with the company of manufacture' etc. Imho.
Pineapple agree totally 're 10039.
This is what I was trying to say earlier but less eloquently! I have the excuse of suffering from my 'procedure' earlier in the day!!

[pineapple1] 03/10/2018 18:36

Conditions can be waived if both parties agree .
It would send the wrong message to the OFAC if such a condition was not clearly stated prior to completion as it would imply that the OFAC can sod off ,whatever they decide the deal will complete irrespective. I,m sure all parties would much rather have a waiver and the deal complete than without.
Alternativiley it may mean exactly what it says of course and a return to where the share price was prior to announcement of the transaction
I don't see why they were changing a lot of equipment to a non US brand if the entire deal was resting on a waiver or not. It would be pointless changing it..
imho

[nigelpm] 03/10/2018 18:21

What a fascinating position we have here.

Interim OFAC license issued until 4 November.

Rhum can continue to operate without the waiver.

And yet the share price is exactly where it was prior to any of this news.

The chances of a longer term waiver must have gone from 60-70% to 80% - perhaps higher and yet we remain in the 80's.

I think this is a great opportunity.

Clearly, we'll be back to 30's if this falls through but almost certainly head towards £1.30 if the waiver comes.

A great risk:reward position.

[farmscan] 03/10/2018 17:57

I understand why people are considering options for a way round the problem of no waiver, but all is speculation and is pointless as management have repeatedly stated, and as recently as the Interims, that without the waiver the deal will not complete. So I certainly hope it appears soon!

[bountyhunter] 03/10/2018 17:53

pineapple, re the US wellhead maintenance issue, one would think BP must indeed have that covered given the recent statement last week:

"The Rhum gas field in the UK North Sea can continue to produce even without a US license to operate, a spokesman for operator BP said Wednesday."

"The expiration of BP's current OFAC license does not compromise the continued safe operation of Rhum," the BP spokesman said."

[sawney] 03/10/2018 17:49

Just a couple of thoughts...

Sure I read somewhere that shutting in Rhum could cause damage to the well/structure..??

...and I can't see the OFAC being bothered about an escrow account....as long as the IOC are not receiving any benefit....until such time as they come to a new deal...??...in fact, it could be used as a bargaining chip as part of a deal done in stages...??

That way, the UK gets it's gas, and the IOC get to see ever increasing bank statements.

[pineapple1] 03/10/2018 17:30

I,m no expert on the national origins and expertise of certain countries in sub sea equipment. What i,m struggling to grasp is the fact that US equipment used on Rhum is not available or perhaps just maintainable by others of non US nationality.
The Chinese copy every thing and the SE Asians are well known for their technical expertise. The russians supply rockets to the US space program.
Is there no one else out there who understands and is accredited to deal with the sub sea equipment On Rhum at least as well as a US national trained in the safe operation and maintenance of this equipment.
Now i know we are dealing with something a lot more important mechanically and technically than an electric kettle but is the safe operation of Rhum really only possible with US involvement on the sub sea equipment.
imho

[captainfatcat] 03/10/2018 17:27

BH yes agree fingers crossed it will all will be fine. If it was definitely unlikely to complete I think SQZ, BP or OFAC would have indicated long before now.

Edit

I think they would have known and indicated long before now

[bountyhunter] 03/10/2018 17:20

CFC, a return to the temporary management scheme would achieve something similar but less severe as only temporary?

[captainfatcat] 03/10/2018 17:18

Another thought, would their be any basis for the UK government be able to seize or nationalise the IOC share paying IOC some form of compensation and making the asset 100% uk owned? Probably highly unlikely.

I think it will all go through myself but I will probably have a sleepless night or two between now and then.

[bountyhunter] 03/10/2018 16:56

DH - glad all went well.

Another out of the box thought is if no licence/waiver post Nov 5 could Serica pay all production costs and leave the IOC share of production in the ground (to be factored in for IOC re future production/reserves post sanctions)? Just thinking, proceeds in escrow would probably be favoured by IOC if the only way to keep Rhum online.

[dunderheed] 03/10/2018 16:55

My main point is that this is a national asset.
I think it will go to sqz because BP will have no choice to close if no licence whereas sqz certainly do have s choice?
However there will be technical risks involved with this and that is why there could be a potential compromise.
In the meantime 'every one' states openly that licence needed because it reduces technical risks for all involved and bp could 'say' that they cannot do deal with sqz without it and that if not issued they will have no choice to close national asset?
Then if no licence occurs there could still be a possible compromise arrangement?
All imho and hope I've made points clearly!!

[pineapple1] 03/10/2018 16:43

DH......was thinking about similar yesterday. BP will be handing over a lot of cash on completion. Some have estimated as much as £100m . Even if SQZ decided to abide by the sanctions after refusal of the waiver they are still left with lets say £100m, plus a shut in Rhum ,Bruce and Keith.
Would Bruce and Keith be considered viable going concerns in the abscence of Rhum production ??. After all decommissioning and mothballing costs remain with BP should Rhum be shut permenetly (which i doubt would be the case as a compromise would be found).
SQZ would partly own own a mothballed Rhum rather than BP.
Now what could they do with all that cash. Quite a lot.
Why would SQZ not want to complete irrespective of a waiver.I don't know.
imho

[bountyhunter] 03/10/2018 15:53

yes good point Spandy, without a bopd figure the RNS wouldn't tell us as much, but wouldn't news be likely to leak if they waited a few days after restart, although perhaps 24hs or so would do it?

[dunderheed] 03/10/2018 15:52

Thanks for all the kind wishes yesterday, much appreciated.
Back now, a bit 'internally' bruised lol but no problems spotted so good news.

One thing I have been thinking is with regard to BP stating (recently) that BKR actually doesn't need a licence from the states to carry on producing.
Perhaps this is in preparation for the 'possibility' of licence not being issued?
Everyone is playing 'hard-ball' at the moment but what if licence was not issued and BP halved the payments required (on initial deal with sqz) because this was not adhered to?
Surely this is a good compromise for SQZ - i.e. they don't 'lose' face re non issuance of licence (can set aside the 'savings' in pchase price for possible problems re sub sea equipment - very unlikely anyway) and BP don't have to stop production because, considering their American interests and the (theoretical) circumstances of non issuance - they would have no choice other than to do that?

I put this up as a discussion point and realise we are all sqz bulls and optimistic but what are the chances of such a 'compromise' being reached if indeed licence not issued i.e. not the end of the world for the deal?
Just thinking aloud like...
Now 'orf to bed lol!

[spandy83] 03/10/2018 14:24

They might wait for a period of flow before RNS so they can say what the flow rate has been since restart?

[bountyhunter] 03/10/2018 12:01

just a reminder to keep your fingers crossed...

[blueball] 03/10/2018 11:37

Buy the dips.

[reallyrich] 03/10/2018 11:33

They have already said they are finished and pipeline testing. Just being commissioned at the moment

[general george] 03/10/2018 11:22

You can check the marine traffic website. It's very useful, has vessel details, planned routes and current position.

I think we would get an rns shortly.

[dcarn] 03/10/2018 11:10

Saw that on FB with accompanying pics on 30th Sept, so if accurate, yes it appears finished at Lomond.

"Simon Steven, the largest stone carrying vessel in the world, arrives in Bonnie Aberdeen. Bound for the Beatrice field we are told."

[general george] 03/10/2018 11:05

CoS.

No vessels at Lomond now.
Simon Stevin (rock dumper) en route to Beatrice.

Lomond shuffle be producing, or about to.

Cheers GG

[circles of stone] 03/10/2018 10:25

Anyone able to update on whether the rock dumper is finished at Lomond?

[captainfatcat] 02/10/2018 21:31

Maybe there is an agenda.

[bountyhunter] 02/10/2018 21:21

Also with their selective editing of the RNS they missed out this rather important statement...

"Discussions with OFAC and other parties regarding longer term arrangements to protect this valuable UK asset are continuing and all parties are working towards a successful conclusion."