Serica Energy Share Discussion Threads

[fardels bear] 13/3/2019 21:45

Well, I've still got my geraniums out in front of the house. I covered them for a couple of weeks in January but right now they're making like proper trifids..That's how warm it's been..Will it be as warm as that next winter? Who knows but we do know that we're on 60% next year.

[oilretire] 13/3/2019 21:42

Errr, I know, I'm merely pointing out the pricing of the empty & fill cycles (TBC) are lower relative to previous years.

[bountyhunter] 13/3/2019 21:34

They refill storage every summer regardless. Nothing has changed there.

[oilretire] 13/3/2019 21:32

Correct, high temperatures have meant less draw down on storage which they are now busy emptying with the hope of filling over the summer at even lower prices.

[fardels bear] 13/3/2019 21:31

Here here.

[bountyhunter] 13/3/2019 21:26

The fact that the UK weather so far this year has on average been warmer than usual is the main one, in contrast the Tennessee gas price for example has remained firm, we won't get warm UK winters every year just look at last winter in contrast. UK gas futures for next winter are over 50p/therm, e.g. Q4 2019 at 51.2p and Jan 2020 at 57.4p which is why today's spot price shouldn't be used to calculate revenue for the entire year.

[oilretire] 13/3/2019 20:39

I'm advised the gas price is a little softer than expected at this time of year as there is lots of supply available from storage & LNG imports.

[general george] 13/3/2019 20:02

Not sure what to make of those little trades. Most odd.

[bountyhunter] 13/3/2019 17:19

Yes CFC, loads and loads of AT's of 35 shares each.

[bountyhunter] 13/3/2019 17:15

In response to my own question, last year results were on Tuesday 10 April, that date was announced on 27 March, so I guess we don't know this year's exact date yet.

[captainfatcat] 13/3/2019 15:30

lots of little trades of late

[bountyhunter] 13/3/2019 13:50

Of course forward gas prices are significantly higher than the spot price today especially for the winter months so why use today's spot price for calculations relating to the whole year. In any case I suspect that the share price will be significantly higher when results are released - when are they due exactly, anyone have a date?

[general george] 13/3/2019 13:45

Abbot,

Time will tell....you have your model and I have mine, which aren't that far away from one another really. I'm happy to be corrected later on - I air on the side of caution.

I agree with your thoughts on Opex, if it can be cut, very good for the bottom line. From experience, I think this will be difficult to do immediately, teething problems, re-organisation etc. But we will have to wait and see, if anyone is capable I think SQZ management are.

Unfortunately UK gas is now down 3.3% now to 39.4p.

Off course the flip side to a lower gas price, is that SQZ may be able to get another deal at favourable costs. You pay your money and take your chance.

*Off topic for DH, Bowleven has 25% Etinde, approx. $30m cash and $25m receiveable upon FID. That cash ($55m) covers nearly the mkt cap. World class partners New Age and Lukoil. DYOR

I'm neutral on SQZ. neither short nor long, I would consider buying back in at around 100p. 120p is a fair price currently, and there is a buying opp on weakness.
As I said before - I was a seller at 140p+ (and did sell some just under too).

Hopefully BP are keen to shift some more assets, and SQZ are in the right place at the right time.

GG

[dunderheed] 13/3/2019 13:04

Yep will do - so look out for it in next few days as a bit busy at the mo!

Cheers ta!

[farmscan] 13/3/2019 12:36

Can I just say that although I don't post much, I like to read all opinions (within reason) and make up my own mind, so as far as I am concerned, General and everyone else please keep posting your thoughts(SQZ).

[steelwatch] 13/3/2019 12:17

the abbot - if you have cloud storage, Dropbox, Google Docs, OneDrive etc., you should be able to get a file share link to put in ADV PMs.

[bountyhunter] 13/3/2019 12:16

While we are harping on about the gas spot price today again to the exclusion of all else I'll just add a little balance again as it's not all about the gas price today as the gas price varies and there is a floor, there are many other factors to consider (some of which should be factored into revenue projections) such as:

1) BKR production increase planned from around 24k boepd to ~30k yearly average

2) Lower opex cost reducing from current $18/b

3) From 40% to 50% share of BKR due to SQZ in 2019 so that's a 25% increase on 2018.
For 2020 that's then a 60% share so a 50% increase on 2018 revenue due to SQZ (more when point 1 is taken into account)

4) Rowallan drill on schedule should hit reservoir early April with TD early May. In the event of success, there is additional upside potential provided by the nearby Dundonald and Sundrum prospects, which are geologically similar to Rowallan. The Rowallan prospect may also extend onto Serica's recently awarded 30(th) Round blocks directly to the south.

5) Columbus development 2020 production 2021

6) R3 intervention should increase Rhum production significantly

7) BKR hub has capacity to handle increased production including from any nearby fields which may be developed by other companies which could increase revenues - BP did not pursue this opportunity for political reasons

8) Looking to extend life of BKR fields and so push back decommissioning - SQZ has lower overheads and is more focused on BKR than BP

9) Decommissioning costs - SQZ will pay 15% after taking into account HMRC's 50% contribution to the initial 30% liability

10) Erskine production restored, 3.2m barrels of oil originally forecast to be produced but 3m produced to date with new CPR indicating another 3m barrels still to be produced!

11) Erskine now producing ~3.5k bopd

12) Post Erskine deal back in 2015 the share price did not fully reflect the acquisition until production figures were released 6 months later, the same may be true of the BKR acquisition

13) Serica's production split is 80% gas / 20% oil

14) Cash rich / debt free

15) Looking for other accretive deals

16) not to forget the Golden Cross on the chart:

[dunderheed] 13/3/2019 12:12

Oh ok - well we can 'talk' about that later! Bit busy now! Best of luck all.

[dunderheed] 13/3/2019 11:41

Bowleven - does look interesting actually.
Real gamble though as seems too cheap?
I think I'm going to try and stick to N Sea at moment.

[dunderheed] 13/3/2019 11:30

Eh FB?
Cheers Abbot, me as well - got these down as a medium hold.