Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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Djm,
I agree. The energy profits levy is misunderstood and a clever illusion to rake in Billions.
The winners remain winners.
https://neweconomics.org/2023/11/the-windfall-tax-was-supposed-to-rein-in-fossil-fuel-profits-instead-it-has-saved-corporations-billions
Jack
Interesting find
BLOG
THE WINDFALL TAX WAS SUPPOSED TO REIN IN FOSSIL FUEL PROFITS. INSTEAD IT HAS SAVED CORPORATIONS BILLIONS
Loophole in energy profits levy will hand oil and gas companies up to £18bn over next three years
BY ALEX CHAPMAN
28 NOVEMBER 2023
Last week the Office for Budget Responsibility (OBR) released new data which highlights how little this government’s ‘windfall tax’ has actually done to rein in the profits of fossil fuel companies.
Back in May 2022, the UK government announced the energy profits levy, as a response to the growing pressure for a ‘windfall tax’ on the massive profits being generated by companies pumping oil and gas in the North Sea. These profits were fuelled by skyrocketing fossil fuel prices in the wake of the Russian invasion of Ukraine. The levy raised the effective rate of corporation tax paid on oil and gas profits from 40% to 65%, and again to 75% in November 2022.
But, it came with a caveat. Despite the UK’s urgent need to kick its addiction to expensive fossil fuels, this government didn’t want to discourage investment in more oil and gas extraction. So they included a tax loophole to ensure that companies investing in new projects to pump fossil fuels out from under the North Sea would see their tax relief (already generous by most standards) rise to 91%. In other words, fossil fuel companies could deduct 91% of their capital investment costs from their corporation tax bill. The ‘windfall tax’ may have, on the surface, attempted to tackle the grotesque profits being raked in by massive companies in the midst of the cost of living crisis – but it also made it cheaper for these companies to extract the fossil fuels contributing to the sky-high cost of living in the first place.
Getafgrip, you are right. In the RNS early April it was stated the these negotiations are underway: "Our attention is now firmly focussed on drawing the Pensacola farm-out process to a successful conclusion and we look forward to updating the market in due course."
Until then, there is little more to say.
We just need news on the deal and I agree with GGG, it should come quite soon.
Generally the negotiations will always be shrouded in secrecy, very sensitive, commercial in confidence, intensely competitive, and keeping various competitors separately in the dark until there is a decision and announcement. Some companies will ensure there are robust non-disclosure arrangements in place before they will even enter negotiations in the first place. So its a bit like the progress with negotiations is the Elephant in the Room - everyone knows its there but nothing can be said about it for the time being.
Interesting that there is no refrence to farmout/ down with regard to Pensacola in the crop presentation...
This is the first trickle of news to come through. Once we get the f/o confirmed for Penascola then we're off to the races. Not including the next licensing round, there should be regular news flow from June. This is just 5 weeks away. Success case at Selene and the NPV10 here is going to be circa £200m, assuming we retain a reasonable stake in Penascola. That's a lot of upside over the coming months. GLA
Worth a look if you have missed this superb corporate presentation from Deltic's website:
https://delticenergy.com/wp-content/uploads/2024/04/Corporate-Presentation_Apr2024.pdf
Rig mob pic already shared in twitter on weekend …
Pl: thanks!
I think most here have had doubts about Delt from time to time, but it IS happening!! Exciting to be a shareholder and see real tangible action again!!
GGG, yes you are of course right: the deal terms are really important. Hopefully, the CEO is negotiating with multiple parties and with confidence!(having just completed the Selene deal; with all planning work proceeding well including a rig contract; a solid Competent Person's Report in the bag for Pensacola).
Agree Dr P on the Penascola deal being the one that has potential to significantly re-rate the sp as it will open up all the milestones and news flow for 2 x major dills in H2. Having said that, it will ultimately come down to the deal itself. If the value of the deal is similar to Penascola for us, then we could jump quite a lot, quite quickly. Anything starting with a '5' or more before we get results would be a great springboard should we have success at Selene. That's where 100p starts to look like a realistic target.
Either way it's all down to the terms of the Penascola f/o now. Not long to wait before we find out. GLA
Dr P I have to agree.
Chart looks primed for a cup and handle
GGG, I agree. Playing the waiting game could prove expensive, as once it moves, it may well move rapidly.
I am sticking to my 71p guess from 8 Feb after both funding deals have been completed😀
Psychologically, the second deal is worth relatively more than the first one, as it removes the huge uncertainty (and fear of a fundraise) around funding the 2 drills.
Holding pattern over the next 2 weeks unless we get news. Reckon we will start to edge up from mid-May as most will realise the f/o could land any day. Providing it's a solid deal I see us in the mid 50's within a week or two. GLA
Malcy writes:
Looking forward life could probably not get more exciting for Deltic, with a rig booked I am expecting the drilling of the Selene well to start in July and to be followed by the Pensacola appraisal by the same rig, back-to-back. With success in the 33rd Round of UK Government licensing and potential still for a further farm-out at Pensacola life is about to get a great deal busier. It remains perhaps the stock in the sector with the most upside potential and investors should climb aboard…
Reckon the next week or so may be the last opportunity to top-up in the 30's. Selene is mobilised in less than 12 weeks. F/o news will drop in between, and I'd hazard a guess earlier rather than later. Feel free to sell folk. I'll happily pick up some more in the mid 30's if we get to that point. Not long now. GLA
Viable, could you elaborate please??
What exactly are you not happy with?
Everything looks in good order to me: 2 x drills lined up this year; next farm up deal being negotiated; apart from Selene and Pensacola, more to come in terms of future prospects. Enough cash in the bank to operate the company for at 18 months.
. . . Swindells has perhaps sucked in too many of us once too often. Care required.
'This success further demonstrates Deltic's ability to attract world class partners and our priority now is to build on the Selene farm out success with Pensacola. We are progressing an active and ongoing process to realise value and farm down our Pensacola discovery with the aim of bringing in another high quality partner and reducing cost exposure to the well.'
There really is only one way to read this and while it's buried in the middle of the RNS and with no other mention of the progress of a Pensacola f/o anywhere else, it's about as good as you can hope for while negotiations are progressing. This seems to be a standard, but very important, style of wording Deltic have used several times during negotiations with the result then being declared almost with no warning (suggesting theres little leaking of any info going on which is excellent). I'd agree with GGG that there's a very good chance of news on f/o in the pipeline. I've deffo got my fingers crossed and may also top up a little if so falls any further.
Date Broker Recommendation Old Target New Target Rating Type
17-Apr-24 Canaccord Genuity Speculative Buy - 160.00 Reiteration
It's good to see buying and selling today should retest the 43p resistance until further news and July drills
Lemmings jumping also not keeping in mind that we got an extra £500k from the Selene f/o this year, and have ZERO costs on Selene from January 01st up until success case. If we do a f/o on Penascola it will be similar i.e. costs reimbursed plus free carry until agreed milestone.
I haven't done the numbers but would expect +£6m to cover our general mgt and admin costs for quite sometime. Essentially DELT will end up with cash of +20% current mcap with zero costs until we get results from both wells. One well is rated at 70% CoS by Shell (not us). And the other is an appraisal that Shell wouldn't be progressing if it didn't see value. Both have opportunity to open a wider area.
Success case on both, which is quite likely, and we'll be pushing 100p with cash in the bank and no costs. If Selene is a monster then we can maintain 25% ownership and raise $10m for an appraisal with about 10% dilution. Not hard to work out what happens if the f/o is on good terms.
Same idgits jumping for 10% will be buying back in a couple of weeks for 20% more. This is why I don't feel sorry for Aim lemmings.
Will gladly pick up some more if we go below 36p. GLA
B... sht again. Everyone was expecting share price to increase to 100p but dropping back to sh... level again.