Serica Energy Share Discussion Threads

[podgyted] 30/11/2018 08:56

I think whatever happens this year on tax its more about confirmation of the income streams for next year.

2018 accounts are going to be a bit of a disaster - Eskine, transaction fees on the deals (hate to think what they'll be), set-up costs of new team and office........

[sawney] 30/11/2018 08:54

Others now completed...

[spandy83] 30/11/2018 08:54

I know, that's why I'm surprised by it... fact is that the cash coming in to Serica is $50m. From Serica point of view that's what it's receiving; any deductions prior to us receiving it are none of our business and therefore not reclaimable.Going forwards my assumption (needs checking) is that cash from production will come directly to us and we make our payments to partners from that (rather than the other way around).

[captainfatcat] 30/11/2018 08:53

Ring fenced tax losses were given as $166M

Edit source 2017 AGM presentation

[messer2] 30/11/2018 08:53

I project net profits (before non-cash deductions) of £91 mln and £104 mln for 2019 and 2020 respectively. At that rate, it won't take long to use up all SQZ's tax losses.
The 2018 tax issue was unexpected but the market tends to look ahead, not backwards.

[bountyhunter] 30/11/2018 08:50

and "Serica is due to receive 100% of the net cash flow (also on a notional post-tax basis) from Marubeni" which is interesting so maybe they are able to reclain some tax?

[farmscan] 30/11/2018 08:50

But the effective date for the takeover was 1st Jan, today was the completion date.

[bountyhunter] 30/11/2018 08:46

Dissapointing re the 'notional' tax, however if we can't use tax losses against this they will be useful in the future and not take long to use up I imagine given future production? Anyone know the size of tax losses SQZ has to offset against future tax?

[spandy83] 30/11/2018 08:44

But it's not our tax. It's notional because before the selling company's financial year is over they can't actually calculate what the attributable tax actually was...Basically BP etc will be paying taxes on these income streams; which they are notionally calculating and then deducting before giving us our cash. I had understood this not to be necessary as technically BP etc haven't earned that income this year - we have. But it looks like for this year prior to the reverse takeover date; the taxes are attributable to the original organisation.I don't expect this to be the case from this point forward; as the cash comes to us directly and is taxed as such (after our payments back to BP etc)

[bountyhunter] 30/11/2018 08:41

Dh re BQE yes did well there but have sold some along the way.
(but also held ETQ which turned into a basket case lol!)

[farmscan] 30/11/2018 08:37

The fact that it is described as "notional" implies that it is reclaimable, no?

[spandy83] 30/11/2018 08:37

I'm not sure we will abbot. As technically we are only receiving $50m - that's the cash that comes into our accounts; not the pretax amount - we can't reclaim tax we haven't paid. On the bright side it means we are only using $28m of our tax offset for this transaction.

[sawney] 30/11/2018 08:34

Peel Hunt have increased a little to 160p.....

[messer2] 30/11/2018 08:30

To add, it sounds right as my model had projected £69 mln for the 12 months using available data. The pro-rata 11 mth projection would be £63 - very close. If so the actual outcome is terrific.

[farmscan] 30/11/2018 08:23

Messer that's what I'm thinking, although it's a bit ambiguous.

[robo175] 30/11/2018 08:20

Serica have tax concessions.

[messer2] 30/11/2018 08:16

Have I got this right:
$50 mln after tax of 40% = $83 mln before tax = £65 mln
Is all this tax recoverable?

[robo175] 30/11/2018 08:15

Conf call at 10am.

[d220] 30/11/2018 08:15

Conference call at 10 this morning for IIs - may lead to buying afterwards......

[farmscan] 30/11/2018 08:09

Not sure about this! "Under the net cash-flow sharing arrangements with BP, Total E&P UK and BHP, Serica is due to receive a 40% share of the net cash flow, adjusted for notional tax of 40%, for the period from the effective date of 1 January 2018 to completion on 30 November 2018. Additionally, Serica is due to receive 100% of the net cash flow (also on a notional post-tax basis) from Marubeni for the same period. This amounts to approximately US$50 million before payment by Serica of initial consideration of approximately US$22 million."

[dunderheed] 30/11/2018 08:09

Bh bioquell bloody he'll that's a name from the past!!

If u bought at the beginning u must be quids in there?!

[dunderheed] 30/11/2018 08:08

"Only" 50 mm!