Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
One other question to any o&g investors who ,like myself , would normally be nervous buying more shares with a new drill campaign imminent. Should we be emboldened by this latest legislation when the project is located in the UK ? It would not be a surprise if any failure continued to get severely punished.
Thanks Elmore
Unless the North Sea is different tax relief for most companies and individuals is normally at the marginal rate of tax.
The idea of 90% tax relief as you spend it sounds too good to be true and must encourage some really marginal decisions and disfunctional activity. I am in DELT and there drills are estimated as a 50:50 chance of success this completely de-risks it for Shell, Capricorn and Delt - but like you no tax expert. Good if anyone knows for sure and could advise
I think the company for a shareholder is win win
1- based on doing nothing earnings even accepting 65% tax are in my opinion warrant a much higher SP
2 - we fill our boots with investing in the NS knowing we get 65% or 90% back dependent on who is right you or I . Stick our £400m war chest in and we get either £360m or £260m dependent on who is right
Brought £10k's worth average 2.66 and pretty hopefull
Banburyboy, thanks for your thoughts.
Why would the tax calculation not be as follows:
PBT £200m.
Tax due at 65% = £130m.
Serica invests £100m in exploration etc.
90% of 100m reinvested = 90m tax reduction
Tax to be paid = 130m minus 90m = £40m
I am not a tax expert though!
Naive1,
Morning,
With the WTL you are assuming vast majority of the levy will not be 'managed'. SQZ I would hope, ensure all available options are explored so we off-set the levy best as possible with NS CapEx & investment ( N Eigg and workover's would take care of majority in Y1, 2022 as its only for 9 months profits, forward looking as of announcement) with follow up drilling & infrastructure in 2023-2025 ... In the meantime, invest majority of our £400m cash overseas into an accretive assets where 'U' turn government can not cripple a whole industry by pandering to Joe Public and get 'one over' on Labour.
If the first years tax levy made little to no revenue for the government, now that would be ashame (lol).... may even force a re-think or a 'n' turn !
PS "in return for an extra 25% share of the profits.." would probably not be paid as by Dec 2025 sunset clause comes into play after which time I would guess 'profits' would start to flow from Eigg, although I would hope Eigg to be producing at some point in 2025. So yes, get UK gov to foot the CapEx bill for next 44 months then SQZ can reap the rewards of one would hope a +60mmboe field producing an additional +20kboepd to our already ~30kboepd
AIMO & DYOR
Naive
That's broadly how I see it but prefer numbers.
So next year we have PBT of £200m. 65% tax = £130m. Retain £70m.
We invest £100m in exploration. 90% is allowable = £90m.
Tax calculation is now £200m less £90m allowable = £110m at 65% = £71.5m tax instead of £130m.
The tax reduction vs the £100m investment is £58.5m 58.5%still good but restricted by both the 90% and the marginal rate of tax of 65%.
Key is previously you had to wait until the asset produced or failed. Here the allowance is as you spend it. So HMT are carrying 58.5% of the risk and the company 41.5%.
I rarely post and have no in depth knowledge . Like others I have been amazed by the reaction to the share price. One idea that struck me regarding our drill campaign this year. I think I am correct in saying there were attempts to farm out a piece of the action last year which came to nought. Well now we have a situation where on the face of it we have 90% approx of the expense and risk assumed by the UK govt in return for an extra 25% share of the profits. Imagine the the share price if another company had offered a similar deal. Happy to be corrected if I have it all wrong.
They have not changed it. Still at 600p.
Yes, I had $713m earnings before tax ... panic and hysteria will subside and value hunters will be back in force.
How has yesterday announcement impacted on their target price of 600p issued last month ?
Note says…
Serica guide to £60m capex in 2022. All is n the U.K.
We estimate earnings before tax in 2022 is $827m making 25% tax on a 7 month basis = $124m. Once the Capex investment shoes of 60m is applied the incremental tax due for 2022 will be $64m.
64m. That’s not even a rounding error given current gas price.
Gift horse. Look. Mouth.
Buy buy buy