Serica Energy Share Discussion Threads

[oilinvestoral] 10/9/2024 12:22

PHAR is in a similar position! Forecast cash flow of 145m by 2026 vs current EV of 117 million.

[undervaluedassets] 10/9/2024 12:08

waterloo

you are not simple.

I have been doing this 25 years but I do not think I have ever seen anything like this

I cannot think of another company that could buy back itself within 3 years with banked net cash. whichever way you look at it that is a successful company. I have never come across this situation before.

But in this instance, it makes no difference.

I have never ever seen a situation like this. It is a deeply profitable company and yet tanking.

What else can the company do?

[waterloo01] 10/9/2024 11:15

Excellent cash generation and fully covered near 20% dividend (in a reducing interest rate environment), output in next period cut, but the reasons aren't fundamental (ie reserve or field decline) but longer servicing of infrastructure, which should pay off in secure production into 25 and beyond.

Move to main market also looks good. Just need some clarification in Budget of what can and can't be used as offset losses.

I must be simple, but I added.

[ashkv] 10/9/2024 10:34

Heavy Buying in SQZ

Trades 1,040
Vol. Sold 1,420,114
Sold Value £1.60m
Vol. Bought 2,383,026
Bought Value £2.70m

[ashkv] 10/9/2024 10:26

In today's Webinar CFO conveyed work is starting on a move to the main market / however, such a move is only allowed within 9 months of the prior audited results.

HY 2024 results are not audited by an external party - CEO has been onboard for 2 months and CFO for 6 months!!

CFO indicated that move to main market will almost certainly happen post FY 2024 results.

Also indicated M&A screening is ongoing at present / and an active process!!!



74sjh10 Sep '24 - 11:21 - 7051 of 7053
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Two simple moves that sqz could have done but didn’t - cancel the dividend and move to the main market.

If they continue as they are, their tax credits will run out in a few years, they will have a far smaller M&A war chest then they could have had and AIM listed paper is not going to appeal to investors for deals as much as main market.

[ashkv] 10/9/2024 10:24

Updated with net cash lower as of 4 September 24 given payment of 2023 Final Dividend [As per 10 Sep 24 presentation]

SP-> 111.10p
SQZ Current Share Price vs 52 Week low of 111.1p on 10 Sep 24-> 0.00%
SQZ Current Share Price vs 52 Week High of 271p on 18 Sep 23-> -59.00%
Brent-> $71.60
British Gas Prices (Next Month)-> £89.50
Shares Outstanding-> 390,457,635
GBPUSD-> 1.310
MarketCap GBP-> £433,798,432
MarketCap USD-> $568,275,947
Cash USD (4 Sep 24)-> $262,000,000
Debt (USD) (4 Sep 24)-> $231,000,000
NET CASH (USD) (4 Sep 24)-> $31,000,000
NET CASH % of SP/Market Cap-> 5.46%
Net Cash Component of SQZ Share Price-> 6.06p
Enterprise Value (In USD)-> $537,275,947
2024 Revised Down Mid-Guidance Production [2024 Guidance 41-44kbpd]-> 42,500
SQZ Average Production Half Year 2024 (30 June 24) -> 43,700
Production Actual 2023 [Guidance 2023 Mid-Point (40-45kbpd)]-> 40,121
Enterprise Value/Barrel Revised Down 2024 Mid-Guidance Production -> $12,642
EV/Barrel SQZ Half Year 2024-> $12,295
EV/Barrel Actual Average 2023 Production-> $13,391
Decommissioning Provision (Per HY 24 Results)-> $133,200,000
EV/Barrel Revised Down Mid-Guidance 2024 Production including Decommissioning Provision-> $15,776
(9p+14p) 2024 Full Year Expected Dividend Yield-> 20.70%
SQZ Net Payout Yield (Dividend + Buybacks (2024 GBP 15Mn) + Special Dividends) -> 24.16%
SQZ + Tailwind 2P Reserves as of 31 Dec 23-> 140,000,000
SQZ Combined Enterprise Value/2P Reserves-> $3.84
Tax Losses to offset tax payables (Half Year 2024)-> $1,000,000,000

[oilinvestoral] 10/9/2024 10:23

My top holdings have been and will continue to be posted on my profile warts and all!

[74sjh] 10/9/2024 10:21

Two simple moves that sqz could have done but didn't - cancel the dividend and move to the main market.If they continue as they are, their tax credits will run out in a few years, they will have a far smaller M&A war chest then they could have had and AIM listed paper is not going to appeal to investors for deals as much as main market.

[ashkv] 10/9/2024 10:10

Baron Investments is a fake... rarely mentions his losers/doesn't display his holdings on X account/for instance akin to OilinvestorAl.

Was trumpeting FXPO for years and it is now a fraction of when he was blathering as to the money spinner his large 7 figure holding in FXPO will be / his largest holding!!! Surely Russia and iron ore risk should have been taken into account!!

Family money / spoilt boy with minimal success now trying to hoodwink to subscribe to his hokum!!!

Recent flip flop on Indivior emblematic of his capricious investment style/advice - bleating about the share / one change in guidance by INDV and share fall Tweeted like a child that he has sold out!! And then the share went up 25% on the next announcement.

The list is endless - Buy ARCM as long as it is under 4p, Recently Baron bought Gem Diamonds higher than it is presently, banging on about Dowlais when it was nearly 2x current levels etc!!! Stated SFOR is a great buy in the mid 50s - went down all the way to 36p post,... Track the fraud and the list is endless... better to buy the Index than subscribe to his nonsense!!!

A total and utter fake!!! Even a monkey hitting a dart board has some hits!!

SQZ at 50p with a dividend yield of 46% - clown!!!

oilinvestorAl10 Sep '24 - 09:56 - 7039 of 7049
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I know a lot of you follow Barron . But I disagree with him here! I can’t see a world where it falls anywhere near that!

[ashkv] 10/9/2024 10:02

Indeed I3E Energy being taken out on the cheap and could be a good play!!!

Jadestone Energy with Asian assets also an attractive proposition!!

RoundtheWorld10 Sep '24 - 10:44 - 7045 of 7048
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I hear there was mention of more acquisitions in safe jurisdictions. They would be well advised to look across the pond to North America. Plenty of undervalued CO’s there particularly in Alberta, Canada.

[ashkv] 10/9/2024 10:01

Detailed in page 6 of today's Half Year Presentation ->



• Serica is well positioned to generate material free cash flow in coming years
• Optionality over capital allocation, with limited committed spend
• In the right fiscal environment, keen to continue reinvesting
• Potential in both the organic portfolio, and to create value for shareholders via acquisition
• Aim to provide an attractive mix of growth and returns
• $5 change in oil price and 5p change in gas price in combination would result in $90 million incremental cashflow

* Cash flow generated at Brent price of $75/bbl and UK NBP of 80p/therm, with headline tax rate of 78% and zero EPL capital allowances

[ashkv] 10/9/2024 09:53

Current EPL is 75% -going up on 1 Nov to 78% -> 3% more is not a lot / investment allowance changes are more of a factor. However, SQZ would have finished most of their drilling by H1 2025!!

Moreover as outlined in the Half Year RNS stated and was reiterated in today's Webinar -> SQZ will generate nearly US$500mn of after tax free cash flow with EPL at 78% and accounting for sustaining Capex to maintain production at ~ 40k boe/d -> This outlook is with Brent at $75 and UK Gas price at 85p.

tabhair10 Sep '24 - 09:40 - 7036 of 7045
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Ashkv, you are one of the more switched on contributors and I generally more in agreement with your analysis than not, but I don't think the capacity for the dividend is as sustained as you think.

Remember, the increased EPL of 78% doesn't kick in until November 1st of 2024, a month and a half away. It's not until the next set of results that we will start to feel the impact of the increased EPL.

[creditcrunchies] 10/9/2024 09:51

Being confident maintaining the dividend if they were being cautious they'd have cut it. My gut feeling is something is brewing

[roundtheworld] 10/9/2024 09:44

I hear there was mention of more acquisitions in safe jurisdictions. They would be well advised to look across the pond to North America. Plenty of undervalued CO’s there particularly in Alberta, Canada.

[swanvesta] 10/9/2024 09:31

Al, why do you keep talking about Uncle Sam? UK companies don't owe tax to the US. Don't you mean Uncle Keir?

[yasx] 10/9/2024 09:06

Headwind Energy!! Great phrase OilAl.

Good summary as usual.

I have been buying aggressively this morning - the presentation was very good, not the usual AIM guff.

[parob] 10/9/2024 09:04

I think we see the bottom going in today. Would be bullish should we finish blue.

[undervaluedassets] 10/9/2024 09:01

yield this year set to be (a well covered) 17%

[undervaluedassets] 10/9/2024 08:58

from conference call..

CEO makes the point they will have produced cash equivalent to the Serica's entire market cap with just 3 years cash generation.

management made the point that given the above and the current shareprice the company is deeply "misunderstood"

I have to concurr

[oilinvestoral] 10/9/2024 08:56

I know a lot of you follow Barron . But I disagree with him here! I can't see a world where it falls anywhere near that! https://x.com/baroninvestment/status/1833410456972624266?s=46&t=ySHTOHElP3t1B4beGtacxw

[undervaluedassets] 10/9/2024 08:49

from conference call...

serious consideration being given to moving to main market and away from AIM.

[tabhair] 10/9/2024 08:40

Ashkv, you are one of the more switched on contributors and I generally more in agreement with your analysis than not, but I don't think the capacity for the dividend is as sustained as you think.

Remember, the increased EPL of 78% doesn't kick in until November 1st of 2024, a month and a half away. It's not until the next set of results that we will start to feel the impact of the increased EPL.

[stemis] 10/9/2024 08:32

EV at 113p = $578m

EBITDAX (for 6 months) = $279m

Market waiting for chancellor to announce changes to tax regime.