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This is a huge tree shake for us. Really not neede. Just market trying to take advantage.
BP share price hardly moved. Indeed was positive last time I looked.
Current UK tax is 30% corporation plus another 10%. Total 40% . Enquest is protected from this 40% by it's "Tax Allowance Credit" This windfall tax is an extra 25% on top.. However you can claw back 90% (of that 25%) if you invest in the UK North Sea on new projects like Bressey etc etc . We are going to do this anyway !!!!
However for the likes of BP and Shell. Now they may want to invest more in the North Sea to claw back this 90% saving on the 25% windfall tax. They may save billions by investing more ! Could they buy some of our assets ?
Don't shoot me mrc, I'm only the piano player.
Looks like Bt fath will get his 33p before the close.
Am fuming but not too sure Enquest will get impacted as much as the headline figure, due to how it will get derived.
I do know that oil will go through the roof as a result of global under investments. Look at the crazily high refinery rates in the US this week They are scraping the barrel.
I wonder how this government thinks it will win anything given its just alienated its own electorate. Bizarre to me .
For Enquest I remain bullish as the intended taxation will see a lot of detractions and won't make north sea oil firms invest here as the incentive is minimal Silly government on all counts
Well that’s it !
7 years of heavy losses to be TAXed to death by this vile government.
We can now safely say the 60p party if cancelled
C@nts the lot of em
Opens up the floodgates for a new acquisition then.
Pity as I was hoping that a bumper profit this year.
They justify it by touting shell/bp mega profits when almost none of them come from the UK, then they hammer tiny UK producers no one has heard of.
Lol AA - hopefully some better analysis than “Simply Wallstreet”
No use of previous tax losses wtf :-(
Looking to dip my toe back in at 33p ish
MRC - as you'd stated, we cant use carry forward losses to shield these profits. "To appropriately tax the extraordinary profits, companies will not be able to offset previous losses or decommissioning expenditure against profits subject to the levy."
The only option for Enquest to shield these 'extraordinary' profits from the new 25% tax is to actually make more capex investments. 91% of any new investments from today onwards will be tax deductible. I can see Enquest go down that route a fair bit, but I'd suspect they wouldn't want to shield all of the profits - the optics of that can't be overstated.
Seems enquest are getting really screwed here.
Hopefully we will get some analysis of the overall impact on profits. Market seems unconcerned at the moment.
You are correct in your belief.
https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022
I believe we can’t use our previous tax losses.
It would be hilarious if Boris is just trolling everyone with this windfall tax. Get everyone all amped up about a u turn then don’t do it.
Not long to wait now, but either way uncertainty will be removed and I suspect we could end up blue today.
And why not tax the banks who have been lining their pockets by forcing indebted oil companies to hedge at much lower commodity prices?
Let’s hope this is right:
“At the opposite end of the scale, EnQuest's tax losses and investment allowances would see it incur little to no incremental UK cash tax exposure.
https://www.proactiveinvestors.co.uk/companies/amp/news/983237
Romaron
Suddenly you care about fairness. When it hits your own pocket you can go about and moan post after post about fairness.
And I guess the other reason you moan is that the windfall tax is not ABs fault. Then it is ok to moan.
LOL.
More detail emerging of windfall tax to raise £7 billion on oil and gas firms, to be announced tomorrow - source BBC.
https://www.bbc.co.uk/news/business-61584546
Should seize Russian assets and accounts and put all that towards a cost of living package for the most needy.
Putin has caused most of this either directly or indirectly so he and his cronies should be directly paying.
As Brent is higher, a 5% on top of the Surcharge would probably be reasonable as was formerly 10% higher when Brent was higher.
The surcharge can flex based on oil prices and that provides some certainty which operators can plan around.
Not the current Kangaroo court/Guardian hand wringing/Daily mail frothing at the mouth populist reactionary and distractionary approach
Facts have to be faced. I'll be glad to be past it. The impact will be minimal financially but it does affect future negotiations between the industry and Government. Companies will have even less investor support now for cooperating with Government. I would not be against moving to another jurisdiction. Fairness would be ALL companies that did well in the past few years contributing but they pick on O&G who really have only had this year.
No one likes us, we don't care [Millwall]
Windfall Tax
So any company making a profit could be charged a windfall Tax
WTF is going on within this terrible country?
Unless your Google, Amazon, Starbucks bla bla
Shysters the lot of them
A Boris distraction tax. No way to run a country.
EnQuest isn't an AIM company so they can't even cut & paste properly. We should know tomorrow the details of the windfall tax. The news channels are saying Rishi Sunak will announce a package of measures tomorrow including a windfall tax. I'd rather call it a "scapegoating tax" but we should escape relatively unscathed although it will dent our tax credits which are valued around zero by the market.
Interesting analysis of any potential tax and the zero impact on enq. Even more interesting is that HBR is going to run out of the tax loss allowance that it got as a result of its merger last year. I think Hbr took on $2bn debt from the acquisition past year and I think got some $1.5bn in tax losses?
Could HBR start looking at enq given enq has much lower debt of around $1bn and tax losses of $3bn? Surely they can see the deal enq current low valuation offers?
North Sea’s biggest oil and gas producers likely won’t feel brunt of windfall tax
"Similarly, 50,000 barrel per day producer Enquest Plc (AIM:ENQ) will be the least affected according to Jefferies whilst Serica Energy Plc (AIM:SQZ) said to be the most exposed.
“While we cannot predict what policy decisions the Government may make and how political and media considerations may factor into those, for illustrative purposes, a hypothetical 10% increase in the UK marginal rate to UK independent E&P producers on 2022 production would, in our view, have the greatest impact to Serica Energy's 2022 net income and free cashflow of approximately 15%,” Jefferies analyst Mark Wilson said in a note.
“At the opposite end of the scale, EnQuest's tax losses and investment allowances would see it incur little to no incremental UK cash tax exposure. We estimate Harbour Energy (LSE:HBR)'s exposure as sitting between the two.”
"
https://www.proactiveinvestors.co.uk/companies/amp/news/983237