North sea is toast and with it SQZ. Here's what the incoming Labour govt. will do:
Labour will close the loopholes in the windfall tax on oil and gas companies. Companies have benefitted from enormous profits not because of their ingenuity or investment, but because of an energy shock which raised prices for British families. Labour will therefore extend the sunset clause in the Energy Profits Levy until the end of the next parliament. We will also increase the rate of the levy by three percentage points, as well as removing the unjustifiably generous investment allowances. Labour will also retain the Energy Security Investment Mechanism.
I once remember a university researcher commenting on a 'failed' experiment. When I asked if he was disappointed of the outcome of 3 years work, he replied, "of course, but then it's not wasted, it's value now is that I've just saved a hundred other people wasting 3 years of their lives...".. Your 10 hours of effort, have enabled me to get to the same point in 5 minutes. Hence my acknowledgement, and gratitude.
I've been a long suffering shareholder since BP sold their stake at around the £3.60 level. It seemed that the management did a huge misstep in buying Tailwind. The prospect of a labour government has killed off the North Sea industry, so the prospects seem very depressing, but you are very brave to buy in now. It does seem that all the pessimism may already be priced in. I would have more confidence if Directors' buys were more substantial than things like £37k
An amazing piece of work. Well written in a clear co case manner. I wish we had this standard of information available for all shares. Thank you so much...... Bossman20
Lovely articel about Serica. I had not realised the board had changed that much since the tailwind deal. Gives me more confidence. Not currently a holder of any north sea asset any more but you make a strong case. Maybe I'll stick with AET, PTAL and SEPL.
"The main criticism to the deal is that the company had accumulated £432.5 million in cash by the end of 2022, so it had more than enough resources to complete the acquisition without increasing the shares outstanding by 40%."
What boggles me is they drove up the share count although they had the cash not to, and now they want to buy back shares with the cash they could have used before to not issue new shares... I don't understand that move.
It was really a RTO, Mercuria wanted equity to effectively control de co’ (as can be seen with new management placed). Without equity the deal would not have happened
I wouldn't hold the current leadership accountable for the conditions of the RTO, those responsible for the deal are now gone. It's like being angry at your girlfriend because your ex cheated on you.
North sea is toast and with it SQZ. Here's what the incoming Labour govt. will do:
Labour will close the loopholes in the windfall tax on oil and gas companies. Companies have benefitted from enormous profits not because of their ingenuity or investment, but because of an energy shock which raised prices for British families. Labour will therefore extend the sunset clause in the Energy Profits Levy until the end of the next parliament. We will also increase the rate of the levy by three percentage points, as well as removing the unjustifiably generous investment allowances. Labour will also retain the Energy Security Investment Mechanism.
Thanks for the considerable time and effort you have extolled in this piece, so others, like me, don't have to.
And having written similar pieces, I know the effort/time involved. So thank you.
(And yes readers here should definitely look at SEPL.).
Thanks Damien, it is quite a long process
I once remember a university researcher commenting on a 'failed' experiment. When I asked if he was disappointed of the outcome of 3 years work, he replied, "of course, but then it's not wasted, it's value now is that I've just saved a hundred other people wasting 3 years of their lives...".. Your 10 hours of effort, have enabled me to get to the same point in 5 minutes. Hence my acknowledgement, and gratitude.
Great analysis!!
I've been a long suffering shareholder since BP sold their stake at around the £3.60 level. It seemed that the management did a huge misstep in buying Tailwind. The prospect of a labour government has killed off the North Sea industry, so the prospects seem very depressing, but you are very brave to buy in now. It does seem that all the pessimism may already be priced in. I would have more confidence if Directors' buys were more substantial than things like £37k
An amazing piece of work. Well written in a clear co case manner. I wish we had this standard of information available for all shares. Thank you so much...... Bossman20
Thank you for sharing this tour de force!
Lovely articel about Serica. I had not realised the board had changed that much since the tailwind deal. Gives me more confidence. Not currently a holder of any north sea asset any more but you make a strong case. Maybe I'll stick with AET, PTAL and SEPL.
I prefer Petrotal - brilliantly executed by O&G Ebgineer as the CEO - consistent Div + buyback
PTAL has been more consistent with its BB program, that's for sure
Many thanks for this piece! :-)
"The main criticism to the deal is that the company had accumulated £432.5 million in cash by the end of 2022, so it had more than enough resources to complete the acquisition without increasing the shares outstanding by 40%."
What boggles me is they drove up the share count although they had the cash not to, and now they want to buy back shares with the cash they could have used before to not issue new shares... I don't understand that move.
It was really a RTO, Mercuria wanted equity to effectively control de co’ (as can be seen with new management placed). Without equity the deal would not have happened
Got it, thanks!
I wouldn't hold the current leadership accountable for the conditions of the RTO, those responsible for the deal are now gone. It's like being angry at your girlfriend because your ex cheated on you.
:-D Great allegory.
Yeah I guess I'm always sort of looking, what is management, what is culture.