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Would love to know opinion on what we will hear on update - what we hope for, what we dream of, and what we might get?
I’d love to see another chipping away at debt (would love to see another 80m off) - possibly an increase in buybacks for H2 - and maybe some clarity on plans on bressay/golden eagle
Hi VoR - AB wouldn't have known the date of the GE but he will have some idea of what Labour's plans are for the O&G industry. Labour have, until now, publicly stated that they are abandoning the North Sea. They are happy with the natural decline and the loss of jobs that will follow after their 'proper wft'. Their draconian fiscal attacks will stop investment in its tracks. They have been dishonest with the costings or (even worse) don't understand and have been misled by the evangelists. On the 6th of November 2022 Ed Miliband said on the Laura Kuennsberg show “solar and wind power is 9X cheaper than fossil fuels”. This was repeated on January 5th 2023 by Keir Starmer in his New Year speech at Stratford and at Davos later on January 19 2023. They need reminding. I think Ed still believes it.
I'm expecting little from the AGM for these reasons.
We are solvent and an important chip in the NS machinations. The Labour rep on BBC QT yesterday said on tax increases to compensate for the overtaxed - "we also need to make sure that the UK is competitive to business to invest as well". That clearly doesn't apply to O&G. On the same show the Lib Dem rep said on the "cost of living crisis" affecting 'ordinary folk' (is crisis a permanent noun in politics now?) said that the big banks had been given a £3bn tax cut by this Conservative govt. which they would reverse and the windfall tax on the big O&G companies wasn't enough and that there is such an enormous loophole in it that there are billions of pounds more they could be paying. By this I assume she meant the investment allowance. That would HALT any further development in the NS.
She is clearly out of touch but then so too are the other parties. I'm hanging on in with EnQuest because I don't think that economic suicide will be tolerated by the public. Sadly the pain is likely to continue.
There is also an outside chance that we are nearing completion of a deal or deals. I doubt the AGM will affect their plans here but Government action trumps everything. Modern populism politics is out of step with reality.
Cash is going to be King as far as ENQ is concerned, a decent reduction in debt which at the same time will further define the likely timescale for ENQ being debt free will ultimately help the sp, backed up by buybacks and eventually a dividend. When the ENQ balance sheet screams net cash in the bank and tax losses to mitigate against EPL, the sp will respond. Unfortunately, it will take time (circa H2 2025/6), but we will get there. It would be a reasonable bet that Brent will stay on average above $80 as down side, production should increase and we know lease costs will come down. So the variables are the government's policy towards NS O&G and any deal that AB might conclude. On the latter, I do not see AB taking on huge debt, more likely to maintain production organically and or avoid major capital costs upfront, although Bressay might be the exception. As far as the government are concerned, EPL is here to stay, GB energy is anti competitive as far as I am concerned and the O&G industry will end up funding this folly, if industry can't make renewables work without subsidies, how on earth will a Labour Government? However, we could see a U turn buy not before 2027 or with a subsequent change of government. Realisation, that longer term, the UK economy needs NS O&G may suddenly hit home as tax revenues fall, job losses stack up, unions get excited and accelerated decommissioning wipes out tax income, not to mention energy security - there could be EPL changes and the longer they leave it the greater the change that will be required.
I though the base line oil and gas costs related to EPL cancellation were meant to go up in April, has anyone heard anything?
Perhaps we should ask AB why the analysts are not updating their targets as we might of expected after the last update?
R , much is afoot but one thing 4 sure is the labour Starmer mood music will be as bland as 70s Musac … Sadly our children seem to have less nouse , believe whatever is being placed before them and leave others to the hard questions ( sweeping know but imho). The result however is the HERD that Starmer CRAVES & Election success! Our Where’s Ed will be deployed to the green belt to campaign & then will be despatched into the long grass once Starmer gets real !!!yes enquest have a glimmer of hope as SVT is a green conversion story that AB has seemingly placed front and centre as Enquest being the ‘Transition energy company’ of the NS Seems the GmB campaign may be a double edge sword for Labour !!! Said our Susan was clever one didn’t I
Mis-type Unite and Sharon … DOH!
And Sharon asked if one of the green jobs created is a Deliveroo rider on an electric bike?
https://www.bbc.co.uk/sounds/play/m001zdtb @12:10 Name one job.
R , an interesting listen !!! Sharon says that Labour are ‘ A party for workers ‘ mmm not sure Stammer sees it that way !!! She’s got the pitbull teeth well n truly in the butt of ED and with Unite & GMB needed to get the manifesto over the line her comment on JC was well interesting !!! Looks like lots of white smoke due at labour central … voters will not notice but the RMT and Doctors likely rubbin their hands … can’t wait till the teachers come out in March … energy will be long forgotten