Serica Energy Share Discussion Threads

[fardels bear] 27/6/2019 11:08

You'd need to go on the other thread and read the claptrap spouted by confers for any of that.

[melody9999] 27/6/2019 11:05

Ok so that all looks very attractive. Anyone want to present the bear case? What are the major risks?

[spandy83] 27/6/2019 11:03

50% of positive cash flow goes to BP; which technically affects the EBITDA. But that's why our cash pile has increased by $50m instead of $100m in first 5 months (roughly speaking).

[overeager] 27/6/2019 10:48

Morning all. Interesting presentation and analysis thereof.

Im looking at the presentation and with 30,000 boepd net and the $20 margin ($35-15) they're making a margin of $600,000 per day, $18m per month. Admin costs were less than $5m last year. Does that mean an EBITDA of something like $210m for 2019? I suspect I must be missing something obvious so please help enlighten me!

[spandy83] 27/6/2019 10:34

How obtuse of you... the average production figure they publish will incorporate any down days (as you well know).The cash owed to BP is evidently already paid as per my previous calculation. So transparent chestnuts, it's embarrassing.

[fardels bear] 27/6/2019 10:16

It's not all about the summer spot gas price as the gas price varies seasonally and there is a floor, there are many other factors to consider such as:1) BKR production increase planned from around 24k boepd to up to 30k yearly average[ 2019 Full Year production guidance of 26,000 - 30,700k boepd, updated 27Jun19 ]2) Lower opex cost reducing from $18/boe[ now $15/boe as announced on 27Jun19 ]3) 2018 results only included one month of production from BKR and less than three months from Erskine4) Serica will pay contingent cash consideration to BP, Total E&P and BHP calculated as a percentage (60% in 2018, 50% in 2019 and 40% in each of 2020 and 2021, nothing after that) of net cash flows resulting from the respective field interests acquired5) Columbus development 2020 production 20216) R3 intervention should increase Rhum production significantly7) 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 reasons8) Looking to extend life of BKR fields and so push back decommissioning as SQZ has lower overheads and is more focused on BKR than BP9) Decommissioning costs - SQZ will pay 15% after taking into account HMRC's 50% contribution to the initial 30% liability10) 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 produced11) Erskine still producing ~3.5k bopd12) Cash balance accumulating - cash rich / debt free[ Cash, cash equivalents and term deposits of US$112.3 million at 31 May 2019 (vs. US$54.9 million at 31 December 18) ]13) Namibia assets - BP have spent $50 million on 3D seismic in Sericas 4,180 sq kms licensed acreage in the Luderitz Basin Blocks, offshore Namibia, now a hot area again for exploration14) Further accretive deals

[bountyhunter] 27/6/2019 10:14

It's not all about the summer spot gas price as the gas price varies seasonally and there is a floor, there are many other factors to consider such as:

1) BKR production increase planned from around 24k boepd to up to 30k yearly average
[ 2019 Full Year production guidance of 26,000 - 30,700k boepd, updated 27Jun19 ]

2) Lower opex cost reducing from $18/boe
[ now $15/boe as announced on 27Jun19 ]

3) 2018 results only included one month of production from BKR and less than three months from Erskine

4) Serica will pay contingent cash consideration to BP, Total E&P and BHP calculated as a percentage (60% in 2018, 50% in 2019 and 40% in each of 2020 and 2021, nothing after that) of net cash flows resulting from the respective field interests acquired

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 as 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 still producing ~3.5k bopd

12) Cash balance accumulating - cash rich / debt free
[ Cash, cash equivalents and term deposits of US$112.3 million at 31 May 2019 (vs. US$54.9 million at 31 December 18) ]

13) Namibia assets - BP have spent $50 million on 3D seismic in Sericas 4,180 sq kms licensed acreage in the Luderitz Basin Blocks, offshore Namibia, now a hot area again for exploration

14) Further accretive deals

[bountyhunter] 27/6/2019 10:14

Sorry missed something from the list...

[bountyhunter] 27/6/2019 10:12

It's not all about the summer spot gas price as the gas price varies seasonally and there is a floor, there are many other factors to consider such as:

1) BKR production increase planned from around 24k boepd to up to 30k yearly average
[ 2019 Full Year production guidance of 26,000 - 30,700k boepd, updated 27Jun19 ]

2) Lower opex cost reducing from $18/boe
[ now $15/boe as announced on 27Jun19 ]

3) 2018 results only included one month of production from BKR and less than three months from Erskine

4) Serica will pay contingent cash consideration to BP, Total E&P and BHP calculated as a percentage (60% in 2018, 50% in 2019 and 40% in each of 2020 and 2021, nothing after that) of net cash flows resulting from the respective field interests acquired

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 as 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 still producing ~3.5k bopd

12) Cash balance accumulating - cash rich / debt free
[ Cash, cash equivalents and term deposits of US$112.3 million at 31 May 2019 (vs. US$54.9 million at 31 December 18) ]

13) Namibia assets - BP have spent $50 million on 3D seismic in Sericas 4,180 sq kms licensed acreage in the Luderitz Basin Blocks, offshore Namibia, now a hot area again for exploration

14) Further accretive deals

[bountyhunter] 27/6/2019 10:12

Thanks TA...

[bountyhunter] 27/6/2019 10:12

It's not all about the summer spot gas price as the gas price varies seasonally and there is a floor, there are many other factors to consider such as:

1) BKR production increase planned from around 24k boepd to up to 30k yearly average
[ 2019 Full Year production guidance of 26,000 - 30,700k boepd, updated 27Jun19 ]

2) Lower opex cost reducing from $18/boe
[ now $15/boe as announced on 27Jun19 ]

3) 2018 results only included one month of production from BKR and less than three months from Erskine

4) Serica will pay contingent cash consideration to BP, Total E&P and BHP calculated as a percentage (60% in 2018, 50% in 2019 and 40% in each of 2020 and 2021, nothing after that) of net cash flows resulting from the respective field interests acquired

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 as 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 still producing ~3.5k bopd

12) Cash balance accumulating - cash rich / debt free
[ Cash, cash equivalents and term deposits of US$112.3 million at 31 May 2019 (vs. US$54.9 million at 31 December 18) ]

13) Namibia assets - BP have spent $50 million on 3D seismic in Sericas 4,180 sq kms licensed acreage in the Luderitz Basin Blocks, offshore Namibia, now a hot area again for exploration

14) Further accretive deals

[bountyhunter] 27/6/2019 10:11

Thanks ta...

[bountyhunter] 27/6/2019 10:01

It's not all about the summer spot gas price as the gas price varies and there is a floor, there are many other factors to consider such as:

1) BKR production increase planned from around 24k boepd to up to 30k yearly average
[ 2019 Full Year production guidance of 26,000 - 30,700k boepd, updated 27Jun19 ]

2) Lower opex cost reducing from $18/boe
[ now $15/boe as announced on 27Jun19 ]

3) 2018 results only included one month of production from BKR and less than three months from Erskine

4) Serica will pay contingent cash consideration to BP, Total E&P and BHP calculated as a percentage (60% in 2018, 50% in 2019 and 40% in each of 2020 and 2021, nothing after that) of net cash flows resulting from the respective field interests acquired

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 as 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 still producing ~3.5k bopd

12) Cash balance accumulating - cash rich / debt free
[ Cash, cash equivalents and term deposits of US$112.3 million at 31 May 2019 (vs. US$54.9 million at 31 December 18) ]

13) Namibia assets

14) Further accretive deals

[bountyhunter] 27/6/2019 10:01

This will do for now...

[bountyhunter] 27/6/2019 10:00

It's not all about the summer spot gas price as the gas price varies and there is a floor, there are many other factors to consider such as:

1) BKR production increase planned from around 24k boepd to up to 30k yearly average
[ 2019 Full Year production guidance of 26,000 - 30,700k boepd, updated 27Jun19 ]

2) Lower opex cost reducing from $18/boe
[ now $15/boe as announced on 27Jun19 ]

3) 2018 results only included one month of production from BKR and less than three months from Erskine

4) Serica will pay contingent cash consideration to BP, Total E&P and BHP calculated as a percentage (60% in 2018, 50% in 2019 and 40% in each of 2020 and 2021, nothing after that) of net cash flows resulting from the respective field interests acquired

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 as 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 still producing ~3.5k bopd

12) Cash balance accumulating - cash rich / debt free
[ Cash, cash equivalents and term deposits of US$112.3 million at 31 May 2019 (vs. US$54.9 million at 31 December 18) ]

13) Namibia assets

14) Further accretive deals

[chestnuts] 27/6/2019 09:55

Spandy

Serica own the lease now and we have a separate agreement with BP ie contract to give them 50% for this yr of the net proceeds now if you remember last yr BP paid our tax , i suspect the same will happen this yr but in reverse, They will have had down days when you go to the agm ask them,

[bountyhunter] 27/6/2019 09:54

Hi TA, could you post a 14) summary item for me to add to the list when I get a chance please as working right now (yes multitasking!)

[manicat] 27/6/2019 09:45

you would think in this day and age they could do a live webcast of the agm or a recording

[captainfatcat] 27/6/2019 09:44

Super thanks for the AGM presentation link

[fardels bear] 27/6/2019 09:19

You'll be wanting the Irish stuff in next, so you will.

[spandy83] 27/6/2019 09:15

Just to add some justification... cash has grown by $57m in 5 months (151 operational days)... in that time we've generated $20 x 30,500 x 151 in positive cash flow; which is $92m... Clearly the above calc is very simplistic but it proves that if we hadn't paid BP their share, we'd have a further $45-50m in the bank.