Serica Energy Share Discussion Threads

[oilinvestoral] 28/3/2024 16:18

Winner winner chicken dinner! Not only do Ithaca shareholders get 7% or so divi, they also "reduce" the cost of their acquisition according to our esteemed resident accountants.... Anyone else see how ludicrous that notion seems?

[hunter154] 28/3/2024 12:27

Hey Lonrho - So there was a simple answer.

[lonrho] 28/3/2024 12:11

Ithaca is ex dividend this morning.

[oilinvestoral] 28/3/2024 10:44

Ithaca shares are down 8% this morning. Does that mean the acquisition of ENI UK is now 8% cheaper? No because that would be illogical lunacy ! It just means that some of the market participants / shareholders weren't fully sold on the merits of this acquisition!Yet the above logic is the same financial engineering that was used to pretend that SQZ bagged a bargain by issuing confetti to Tailwind PE owners!Call me old fashioned but I prefer my companies to gap up in price after the announcement of an acquisition not go down to kid myself that I got a bargain! I still believe ENI UK is many times better than Tailwind! Good examples of value enhancing oil acquisitions I've been involved in the past AET buying Angolan assets 2022-2023RRE buying Marathon 2019SQZ deals between 2015-2017

[oilinvestoral] 27/3/2024 16:16

It wasn't Iona Energy. Iona made some clangers but the good thing they did was ensure that all payments were in instalments paid into the future. The collapse in oil price and the financial difficulties they encountered meant they never ended up making the majority of the payments. I don't recall Iona paying that much. Fun fact: we now own the Iona energy assets because Decipher Energy bought the Iona energy assets from the administrator & Atlantic petroleum, Tailwind bought Decipher Energy and we (SQZ) paid an egregious amount allegedly for some tax losses that Tailwind had...

[lonrho] 27/3/2024 15:31

oilinvestor

That wasn't Iona Energy was it, i remember them paying 37 dollars a barrel for north sea production, oil price collapsed and they went bust in 2016.

[mariopeter] 27/3/2024 14:59

Thing is Stemis you will see dividend growth (Mercuria will make damn sure of that) but Oilinvestor knows that Mercuria will have all the cream. KIST was the company for SQZ although I hold neither cause Government will have too much of any profit, cream or no cream. Watch how Mercuria sell more assets to SQZ with cash ripped out of them like Tailwind. Can't see existing management shaking Mercuria. If Mercuria sell SQZ you should too cause that will be top dollar but that will not be for a few years.

I liken SQZ to a beast with a lion chewing it but being very careful not to kill it. One day the lion will stich up the beast , give it a kick and it will look normal. The lion will sell the beast after applying makeup. Tell me what happens the beast after that. (one kidney, a heart, a small brain, half a stomach and cosmetic fat).

Flegg felt Mercuria were going to bring some good deals but Mercuria will keep all the good ones for themselves cause they are ferociously greedy and will bung off skeletons to SQZ.

[oilinvestoral] 27/3/2024 11:07

Also just for the accountants (other than EV/2P) there's another metric that we use in my industry to price & judge acquisitions! It's callled EV / flowing bbl (self explanatory but if any of the bean counters need an explanation let me know).Does any accountant want to calculate how much we paid Tailwind in terms of EV / flowing bbls? The good thing about flowing barrels is that they are not subject to annual CPRs (unlike reserves)! Therefore more difficult to move the goalposts and change the dates etc! I won't hold my breath for an accountant calculating this as it was an egregious amount that our Fleggy defenders don't want you to know about ! One of the highest I've personally come across! I believe only 1 North Sea company made a worse deal a while ago!

[oilinvestoral] 27/3/2024 11:00

How much tax has been saved by all those amazing tax losses that have destroyed our previously bullet proof balance sheet! When I said it was better than tailwind it was based on:1) It provides significant scale (double the production and 2P of tailwind)2) it wasn't purchased from private equity! 3) it doesn't come with mountains of PE loaded debt ! Comprehende?I still stand by that! So are you going to recalculate the acquisition cost or not in a few months (just like you did for SQZ lol)! Call me old fashioned but I prefer my shares to rise after an acquisition announcement! Not fall in order to artificially justify the egregious price paid!

[stemis] 27/3/2024 10:47

I'm merely responding to those who says it's just the sort of deal SQZ should have done. Funny, when I posted the actual numbers, suddenly it's too early to know. Certainly it's a bigger deal than Tailwind but it costs more and potential involves a lot more dilution, at quite a depressed share price (over 40% lower than it's listing price just over 16 months ago) and comes with no losses. Perhaps you need to borrow my 'abacus'...

[oilinvestoral] 27/3/2024 10:20

Aren't we going to wait until the deal closes in many moths time? Just like you did with SQZ? What if the Ithaca share price falls to 100p? Or 70p?Also what if they upgrade reserves later in the year ? Or next year ? Using your abacus Calculate how much they would've paid please ! That's the twisted logic you used to justify tailwind after all...

[oilinvestoral] 27/3/2024 10:16

The 38% of the issued share count is just indicative! It's subject to further DD and further negotiations. But if they manage to secure it it's a brilliant offer! Given the choice, I certainly know between ENI UK & Tailwind which one I would choose! You obviously disagree lol! People are saying it's good because:1) It provides significant scale (double the production and 2P of tailwind)2) it wasn't purchased from private equity! 3) it doesn't come with mountains of PE loaded debt ! Comprehende?

[stemis] 27/3/2024 10:10

First of all that’s not true! The financial details are still to be fully agreed (as per the RNS)!

So why are people coming on here claiming it's a great deal. Actually what the announcement says is

Eni will contribute its UK business in exchange for the issuance of new Ithaca Energy shares to Eni, with Eni anticipated to hold between 38% and 39% of the enlarged issued share capital of Ithaca Energy following completion

39% amounts to 649m new shares to add to the 1,014m shares currently in issue. I'll do the maths for you; 649/(1014+649) = 39%. Current share price 146p. 649m x 146p = £950m.

[coffeecanportfolio] 27/3/2024 10:06

I agree as well . Looks much better than Tailwind on first glance.

[oilinvestoral] 27/3/2024 10:05

First of all that's not true! The financial details are still to be fully agreed (as per the RNS)!Secondly and more importantly: Aren't we going to wait until the deal closes in many moths time? Just like you did with SQZ? If the ITH shares collapse (just like the SQZ shares did) you can do the same financial engineering to pretend we didn't get raped by private equity ...

[oilinvestoral] 27/3/2024 10:01

A neighbour buys a brand new Porsche 911 3.7L turbo that has better specs than his neighbour's older Porsche 911. When the neighbour with the lower spec Porsche finds out he overpaid by a factor of 2x , he becomes green with envy and mumbles & mutters to his more prudent compatriot "but but but is yours blue"!

[stemis] 27/3/2024 10:00

According to the announcement, the cost is potentially £950m in ITH shares for c 100mmboe or £9.50/boe with no tax losses. That compares to £10.41 for Tradewind, with tax losses. Doesn't look that fantastic a deal to me.

Some on here have lost a sense of perspective

[mariopeter] 27/3/2024 09:54

Agree with that.

[oilinvestoral] 27/3/2024 09:44

Hopefully not! Hopefully just a clean balance sheet of historically profitable assets that haven't been raped and swindled by private equity...

[stemis] 27/3/2024 09:43

Does it come with any losses?

[mariopeter] 27/3/2024 09:38

Yes Oil investor it looks neat.

[oilinvestoral] 27/3/2024 09:33

More importantly : thoughts on the massive proposed deal by Ithaca to acquire Eni UK! 100 million 2P reserves and 45,000 BOPD production! Looks pretty substantial! Financials are still TBC but if they can secure it at around £700-800 , it's a solid piece of business! That's the kind of deal we HAD the fire power to do before we bolstered the pockets of private equity...

[hunter154] 27/3/2024 09:29

Thoughts on what Ithica’s results do for SQZ?
Good cash generation and interesting that they will reduce production due to EPL.

[stemis] 26/3/2024 14:18

So, some shares were held back to cover warranties issued by Tailwind as part of the acquisition. Since there have been no claims under the warranties, these shares have now been released.

Not sure what your point is...

[ashkv] 26/3/2024 14:02

Salt on the wound more share to Tailwind / Mercuria for the dog of an acquisition - WHAT THE HECK IS GOING ON? IS FLEGG LEAVING SQZ FOR A CUSHY JOB AT MERCURIA?

Issue of Shares and Total Voting Rights

London, 26 March 2024 - Further to the announcement of completion of the acquisition of Tailwind Energy Investments Ltd on 23 March 2023, Serica Energy plc (AIM: SQZ) announces the issue to the Seller of 1,438,849 new ordinary shares of US$0.10 each in the capital of the Company. These new shares are the second and final tranche of the 2.9 million Consideration Shares[1] that are being issued in accordance with certain warranty provisions of the SPA.

[1] As stated in the announcement of the Acquisition on 20 December 2022, the total number of Consideration Shares was up to 111,048,124 and is now confirmed to be that amount.