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If you believe in this global warming, net zero nonsense, I have a moon ladder in my garage for sale.
Just extend it out and a few steps later, you're the new Neil Armstrong....honest.
Https://www.verywellmind.com/an-overview-of-the-dunning-kruger-effect-4160740
Climate deniers?
Should we believe you in preference to these two deniers?
https://www.youtube.com/watch?v=9UEx_XqT3rE
https://www.youtube.com/watch?v=pj-Iu1i317E
China has as much installed wind as the next 7 countries combined
Solar - more than the rest of the world combined
Maybe they ARE doing something - just that they use a lot of energy making stuff for the rest of the world - we've exported much of our carbon production, and no reason why we shouldn't do something
Maybe stop listening to the Climate Change deniers?
Everyone is loving your posts DU. Our IQs go up a point or two as we think about them. Just not much to add tis all
Thank you for your courtesy, CHF.
I assume you are the sole person who regarded my posts as worth reading? Took me 2 hours + to put together. Guess there's nothing in them worth discussing
Thank you again for your views Dick.
Liam Halligan ( a great guy) and you just confirm my view as a recently ( but coming on for a very long time)
ex-Conservative Party member, that the Tory Party is now a Centre-Left Party.
G'day Einbert. I assume you're travelling 'first', not standard. Perish the thought. You're brave risking London. Mind the peace-loving Arabs and ffs don't let on if you know anyone they disapprove of. And yes, I might be fairly accused of something ending in ...phobia. I just want my country back.
The validity of NPV using forward DCF projections depends fundamentally on the underlying assumptions on a whole range of things being broadly accurate: eg future oil & gas prices, discount (for risk) rate, opex and capex forecasts, tax rates - you name it. The skill lies in understanding enough about a particular company, the industry it operates in and the particular issues facing the company you're valuing, to make reasonable assumptions that get to a broad value that might be capable of corroboration.
All a bit complicated to the man (can I use this term without being arrested?) in the fabled Clapham omnibus.
Talking of clap(ham), I hope the disgraceful politicians' spouses give them all a nasty std. They deserve to have their lives wrecked as well
Hello Dick, I’m a bit preoccupied today. The 5star pump is playing up and the pikeys have half-inched the airline . Again.
Thanks for your posts. I’ll have a read and a think on Berry’s Bus while travelling up to the smoke. ( they’ve given me a few days off )
If the figures are so bad (negative) why not pull the plug now?
I remain nearly optimistic or at least hopeful. I think Herr Benitez is still driving round Jersey in his limo, so things can’t be too bad
It also occurred to me that it's possible (I don't say likely) that if NEO does find a buyer, maybe JOG could "piggy back" on the deal and provide a buyer with an offset to (net) cost of buying HitecVison's (HTv's) subsidiary, NEO Energy by selling alongside NEO. Now that Labour has confirmed its intentions to destroy the North Sea oil & gas industries (despite logic, the loss of countless billions of tax revenues in the short, medium and long term, the trashing of countless tens of thousands of high-skilled British workers' jobs, as well as their hopes and aspirations - their families' too - the need for Britain to look elsewhere at huge increased cost and carbon footprint for the energy it needs to keep the lights on and avoid mass hypothermia - forget energy security; we'll just increase our reliance on our friends and allies, like the US, Qatar, Saudi Arabia? Russia even .....NEO would wreck HTv's overall IRRs if HTv retained its interests in the UKCS, which now offers nil or worse returns for a great deal of effort and risk. Investors in HTv would be more than disappointed were HTv to sacrifice monetary returns for pious causes; let's face it, money talks. How much is enough for the high-rollers? "More" is the truthful answer.
I talked earlier about JOG's 350p per share using DCF numbers to get to NPV10 (10% risk factored into the numbers - cumulative; I didn't factor in "cost of money" - too fussy; I was only looking for ballpark values). Let's try to put some flesh on that bone.
Cash £35m post FDP
Tax losses: £65m @ 40% discounted by 50% = £13m
2P reserves post FDP - say $5pb (ultra conservative with no capex)
25mmmboe @ $5pb = $125m or £100m
Throw in Verbier Deep, Cortina and Wengen for nothing
I make that £148m divided by 36m shares (fully diluted) = near enough £4 a share.
I'd take it - with politicians out of control, the risks are just too great.
jmofwiw
dyor
It literally is - 'permanent destruction'. Even at pre-EPL conditions production declines much quicker than demand - because NS is one of the most expensive places in the world to extract oil on an OPEX basis. Much investment depends on legacy infrastructure - once it closes, it accelerates other things to close - and would never be profitable to re-establish.
I notice Waldorf is in the news looking extremely precarious on bond covenants. There will be more to follow. Politicians must come to their senses, but the longer it goes on the more embarrassing the U-turn.
To equate the global profits of super majors with NS tiddlers is one of the the most egregious needless deliberate misunderstandings ever. But we are a big, dumb post industrial democracy and will chase ourselves into obscurity whilst the developing world takes over.
Some type of clarity on taxation and positive signs on GBA progress will push the stock much higher. Here's hoping.
'Concerns over Global Warming' is honestly a joke. The UK currently contributes leas than 1% of man produced CO2 while China alone (whilst currently increasing coal burning in power stations) contributes 27%.
Lets tie ourselves up in enviromental knots and red tape whilst other countries like China do what they like and press on with their own agenda regardless.
Madness.
I'm tired of the rank mis-management in this country. You only have to look at the Migrant Crisis to see how utterly crap Government are in this country. Failed asylum seekers aren't even being deported, they are just left here in limbo wandering the streets living off charity handouts whilst they keep re-applying. It's honestly shocking.
Forgot to say that it might be good news if a buyer emerges for NEO (I mean the whole company, not its assets) because whoever was to buy it would presumably be reconciled to proceeding with the Buchan project, regardless of the insane levels of tax involved.
ITH is fav afaic but wdik? It's just a guess. Whatever happens JOG will end up a lot better off than it was when I first became a shareholder in 2015, having blown a stack buying 1% of TRAP that was worth sweet FA when AB and RL rode in with a bold plan but no chequebook. They won me over and I've somehow managed to keep the faith/ It's said you make your own luck in life and the shenanigans that went on as a result of stirring things up when it became clear certain people wanted TRAP buried would take some believing. I have it all in writing - just think it's best left in history. TRAP wasn't allowed to go bust and we know the rest.
It is a travesty that a risk that couldn't possibly have been foreseen (incompetent, morally bankrupt and downright dishonest politicians - from both main parties; the LibDems would be no different) deliberate scuttling one of Britain's most valuable industries, thus ending the hopes and aspirations of so many people who have put their all into this well-run company that has had so much thrown at it over the years, yet still fights on despite all the obstacles put in its way. Welcome to Britain in 2024.
What more can one say?
Contd:
Not only have Labour not backed off, but they have failed to make it clear that the disallowance of capital allowances will only apply to the EPL part of the overall tax charge, the same applying to interest cost and b/fwd losses, until now available for offset against ringfence profits. They have also threatened to backdate these draconian proposals to catch companies (perhaps like NEO and SQZ) who have the good sense and initiative to accelerate spend on the infrastructure, so that the major part of the overall spend is made before the Consevatives are kicked out.
My calculations show that the overall Buchan project has a negative NPV10 of £484m (I've taken the first 10 years of numbers - there's very little NPV effect after about year 7. In getting to this, I have applied what I think is the most likely approach Labour will take, which is to allow b/fwd losses at 40% and restrict decommissioning and interest cost allowances similarly - and not backdate the tax grab to whenever they had in mind - I'm pretty sure that would be illegal anyway - not that they would care).
It's the availability of the enhanced reinvestment relief that makes the difference. With it, the negative NPV10 reduces to £138m. But there's the FPSO to take into account. I'm talking about the whole project, so NEO's share is 50% and SQZ's 30%, although I can't quite get my head around whether this should be 62.5% and 32.5%, because NEO and SQZ are the ones spending all the money.
JOG's NPV10, by contrast, would give it a value per share of around 350p ps, the problem being it won't be able to lay its hands on any revenue from oil that's stuck about 11,000 ft below the surface because UK politicians want to buy in as much LNG and oil as possible to mitigate the shortfall in the oil and gas they've deliberately chosen to forfeit by making profitable NS extraction impossible.
All might not be lost, however, because there will still be organisations willing to pay the heinous taxes Labout has in store because they attach far more importance to the certianty of supply than how much tax they'll pay. ENI and VAR Energy (respectively owned or part owned by the Italian and Norwegian Governments) bought Neptune Energy (VC backed and 3rd biggest UKCS producer,)which sold out its UK UKCS assets pdq after Sunakhunt struck. It surprised me recently to learn that ITH had agreed to buy those same assets not two years later (they must have offered something tempting for ENI to sell). That was until I realised that ITH is 90% owned by Delek, which itself is owned by an Israeli outfit that has multiple interests across the board in Israel - one of its companies happens to be the biggest forecourt operator there. Is something happening there?
You might have heard of it, Einbert?
Someone seems to have the jitters and is unloading shares on an unreceptive market. Let's play "guess who".
"What are you? Man or mouse".
"Squeak, squeak"
Au revoir
dyor
Https://www.telegraph.co.uk/business/2024/04/14/britain-north-sea-oil-resources-protect-rising-fuel-prices/
....extract:
"As rising oil prices complicate the UK’s escape from this ghastly cost of living crisis, it was noteworthy a British energy company announced last week it is to start drilling at the biggest oil field discovered in the North Sea in at least 20 years.
EnQuest plans to bring two fields onstream with the potential to produce 500 million barrels of crude over coming decades. This reignites the political battle over the UK’s energy future, with the Tories having just extended the 75pc “windfall levy” on North Sea output and Labour threatening to block new production completely, citing environmental concerns.
This makes no sense. There are around 300 active North Sea oil and gas fields, over half of which will cease production by 2030. The North Sea currently delivers the equivalent of 83pc of UK oil demand and 54pc of our gas use. What are our plans to replace those supplies?
Even the Climate Change Committee, the official green watchdog, acknowledges fossil fuels will still account for around half of Britain’s energy needs by 2030 and a quarter by mid-century. And that’s if the proposed net zero 2050 transition to renewables is achieved, which looks pretty unlikely.
So if that’s the case, that we’ll be using oil and gas for at least the next three decades, why not drill our own? Even if such energy is exported, at least UK energy workers would keep their jobs and the Treasury would get the tax".
Returning to NEO and HitecVision, the later is a VC fund. It has $8bn under management from hi-rollers who demand better than average returns. HitechVision has under its umbrella a number of different entities, all looking to produce impressive IRRs. NEO is among them and (as far as I can tell) is the only one focused exclusively on the UKCS. Sunakhunt's EPL was already in place when NEO farmed into Buchan about 12 months ago. It must have been relying on either: (i) the Conservatives winning the next GE or (ii) much more likely, Labour coming to its senses and relaxing its punitive proposals, particularly those relating to the closure of so-called "loopholes" that allowed companies like NEO and SQZ to avoid 90% of the destructive EPL by investing in new infrastructure. This would have enabled NEO and SQZ to acquire infrastucture estimated to cost £900m for about 9p in the £ (£c.£80m - a saving of £820m.
tbc
Interesting article by Liam Halligan (economist) in last Sunday's Telegraph. It seems incredible that politicians continue to ignore the expert - and well-intentioned - advice of any number of people it's clear understand the economic and other consequences of both the Conservatives' and Labour's industry destroying proposals a lot better than they ever will. I cannot attest to being an avid reader of the bible, but am sufficiently aware of its content as to be enable to come up with Luke 23:34 .............."forgive them Father, for they know not what they do", which applies admirably to these devious cretins. I personally wouldn't be inclined to forgive them - I'd have them tarred and feathered.............but that's just me.
Before posting the link and a relevant extract for those failing to scale the pay wall, a quick word on NEO and the rumours it's soon to be sold by its owner, HitecVision https://hitecvision.com/about-us/ wouldn't go amiss.
This is no real surprise, given the continuing uncertainty over just how damaging to Britain the permanent destruction of an asset, the UKCS oil & gas industry, will be. All to provide money (it won't) to dish out to people who claim they can't afford their energy bills. The belief of Mr Bouncy Big-ears (our PM) - who's not sure which country to call home - that people will vote for him if he gives them money is laughable. And before the liberals jump up to criticise my heartless attitude to the poverty stricken masses, I include myself in the latter, thanks to Sunakhunt, JOG, HBR & SQZ and of course Labour, which was only intending to tax windfall profits - where are they, anyone? - by an extra 10% whilst BC and gas prices remained above the norm - until Sunakhunt showed them the way to fill the Treasury's coffers with your and my hard-earned and (so we foolishly thought) shrewdly invested money. I have limited sympathy for a category (seemingly the majority) of British people who are said to be 'living in poverty'. A modicum of 'forensic' thought might fairly be given to why people find themselves in this position - if indeed they are. Might it be because they've never denied themselves anything, often equipped with the latest smartphones, treating themselves to holidays whenever the fancy takes them and generally spending every last penny that's passed through their hands on themselves, with no thought given to rainy days ahead. "Savings"? What are those. According to a Finder report in Jan 2024, the average UK adult had £11,185 in savings and about 46% of people have £1000 or less, with 25% have £200 or less. Seems to me to be a case of: "we've spent all our vouchers and now we want yours". Successive Government have pandered to this and the race to the bottom has accelerated. Any society making a virtue of underachievement is destined for failure. Britain has all but failed.
ST article in the following post.........
I see JOG is back to cash value, ignoring its oil
dyor
Several documents on here relating to Buchan approvals with letters back and forth between Neo and secretary of state, most recent from a couple of weeks ago https://www.gov.uk/government/publications/buchan-redevelopment-project
End of March shareholder information shows little change other than the Ravenscroft holding rising from 3.16% to 5.06% and a small increase by UBS from 3.77% to 3.96%. As per previous TR-1 the Nick Robinson holding has dropped below the 3% threshold and so does not appear on the updated list.
Well said Dick
I have to suffer both Westminster and Holyrood.
There would be no point sending a letter to Holyrood, unless there was a section for the MSP's to colour in.
They struggle with basic Arithmetic as well.
Probably a good idea to pour boiling water (heated from a sustainable source) over the whole place.
You may well come up with a new flavour of pot noodle.
Our lot are getting bored with destroying the North Sea Oil and Gas sector (albeit they are still going to fund independence though oil revenues - aye, right) - they have now decided to put the boot in to people with wood burning fires (quite a lot of the Highlands and Islands)
Burning wood is now apparently off limits, albeit up until a few weeks ago, biomass was the "in thing"
The brains in Holyrood (you could fit the inside an empty aspirin bottle and still have some room) have no idea how to grow an economy.
When it comes to taxing or banning things, well, hold their jackets...nothing is off limits.
Free speech is now illegal up here. If somebody up here gets hurt feelings over something you say, you can get a police record...the best of it being the police don't need to tell you that you have a record. You get that nice little surprise if you go for a job interview, or for a visa to travel somewhere and then learn that you are a criminal.
I'll probably get arrested for posting this.
Sadly, it isn't funny anymore.
Edinburgh, the Athens of the North. Not now. It's the Tehran of the North.
Enjoyable if depressing post DU. UK really is going down the economic swanny in more ways than one. I just don't have the nuts to move to Texas however.
I watched Steve Brown talk on the Orcadian presentation, one of his interesting points was that the NSTA is increasingly lining up behind low emissions projects, and getting tougher on high emissions ones.
My dream would be that Lab use this as the way to proceed. Investment allowance only on electrification ready stuff, and tax raid the rest. Morally that's grim but it does suit a JOG shareholder. Perhaps it would be a good to to push green agenda without killing NS.
I think we ALL agree with you, DU, that the share price is battered because of the c**ts in Downing Street and that their actions, and the actions of the incoming LIEbour gvmt, will finally destroy the NS O&G industry. (From my perspective, the industry themselves have been complicit in this, since they refuse to man up and give a strong response in their own defence, with the typically apathetic British attitude of, "Oh, it'll be alright, I'm sure they don't mean it; have a cup of tea.") Sadly we must deal with the reality we have rather than the reality we wish we had. I only hope that when NS production starts to fall off a cliff that the Iranians close the SoH, and then I might take out a full page advert in the Communist Comic saying something like, "Can't afford pay your heating bills or fill up your tank? Dont blame the c**ts in Downing Street for doing what Joe Idiot-Public said they wanted, look in the mirror at the tw*t who sided with the Greenies - you're now experiencing EXACTLY what you said you wanted, the demise of Britain's Oil industry!"
Quite an eye opener when considered in the manner you set it out.
It begs the question as to why industry leaders have not put the question to government in the same manner. Perhaps they have and it has fallen on deaf ears. In any event once the CNS is dead, watch out Tesco or maybe the banks with Q1 results due in a couple of weeks.
............if you've read Part 1, in fact additional revenue generated by the increased BC price would fall straight to the bottom line (as shown in my example). Don't quite know why I confused the issue with my "pro-rata" nonsense. Out it down to age and general infirmity.
Any ideas on whose gonna win the Masters, anyone? I've backed a few outsiders at long odds (a bit like betting on AIM listed oil juniors except that the Conservative and Labour parties can't shoot the golfers at Augusta).
Tips for Saturday's Grand National also appreciated. I'm thinking of liquidating about 10% of my JOG holding and backing one of Willie Mullins horses but might decide to put the money on a golfer as he's less likely to fall over.
........."so you shouldn't suggest some kind of allowance is due".............not should
mea culpa
Goodnight and goodbye (for now at least)