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Aimoil
It is not the book value of the Bressay assets that matters but the tax carrying value. As a result of the 100% first year allowance the tax carrying value for Bressay and all out field assets is zero (this is why we have such large tax losses).
I have had a look at the EPL tax legislation and all field and associated asset sales are subject to EPL unless the field/asset is being converted for CCS. This can be avoid if you sell a legal entity (containing the asset) rather than the actual asset.
The financial statements also disclose that the net cash from partial Bressay sale is $58m ($108m received - $50m EPL). EPL is calculated on gross sale proceeds - $140m*35%.
The crazy thing is that if the transaction had been completed on 1 Jan 24 as opposed to late December, the $50m EPL would not have been payable until October 2025
Stevo, regarding whether EPL can/was be applied to Bressay deal sale, and given it's important to understand about this, is it not best to ask IR?
AIM, what was bad about the timing of the RNS? That the share buy-backs, which were part of the good news, were announced in the same RNS, or something else?
Stevo, I do not see how EPL can be applied to Bressay sale unless it has a book value of zero and the sale price or a proportion of it is regarded as pure profit on a NS asset, surely that cannot be the case? If it were the case not only would the government have stolen 35% of the profit on operations but 35% of element of an asset showing above book value. This has some logic but is another element of the scandal if true that had not registered with me.
We need clarification on the Bressay deal, sale price, rumoured loans to Rockwell and tax implications - I am now confused following the various comments, RNS and presentation Q&A's etc.
Overall not a good day despite an excellent RNS. Bad timing for the RNS but hopefully the positive news will percolate through to some positive analyst reports and upgrading of targets in the next couple of weeks.
What are you on about Stevo?
Stevo, do we need to infer more about the role of EPL in asset transactions more generally?
Is this a realised O&G profit hence subject to EPL?
VOR
My understanding is the RBL has been repaid using $108m of cash from Rockrose and $32m from Enquest’s cash reserves. This will save approx $13m of interest in 2024.
With $108m of cash received from Rockrose, a little surprised that net debt only reduced by $71m in Jan/Feb which highlights negative trading FCF of $37m. Presumably reflecting the timing of loadings.
SEK - I have had a more detailed dig into EPL and the reason EPL at $175m in 2024 is that Enquest is paying $50m EPL on asset sale to Rockrose, which is an absolute scandal.
Debt has reduced by
Agree Enq. are doing everything right but until we have long term Fiscal clarity and stability this Sector will I suspect largely be driven by Traders. Time to refocus our efforts on getting the message out there, that in terms of Energy Security we’re a valuable partner.
Oil is also going great guns #unbelievablegeoff
Krakenoil it’s unbelievable what more could have AB and his team have done it was a cracking rns and webinar.
A few weekly swing trades might be the best strategy with a portion of our holding with it now being thrown around every day.
Why wouldn’t they ? Enquest has done exactly what they said they were going to do.
What’s not to like ?
UK markets, maybe they just don’t have faith in the company.
Can’t believe we couldn’t hold a rise on todays news
Just shows you how bonkers UK markets are
Right so we saw the rockrose money flow - coming through basically to pay off last years funding and a lot bigger than we expected
We’re clearly raking it in at over 82-86bucks a barrel (simple cost per barrel vs revenue makes this irrefutable) but i struggle with the 140m rbl pay off as its still pretty much down as existing everywhere else - did we use the rockrose cash (plus another 30-40m) or has that not filtered through to net debt yet?