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Very quick spike Dumbly, it's back to 87.65 for Brent. Very responsive, but hasn't held. Seems the attacks were almost symbolic rather than intended to cause harm. Maybe that'll be the end of it, pride restored and no damage done? Fingers crossed.
Oil back over $90 following reports of missile attacks in Western Iran, Iraq, and Syria.
Redb
My 2025 forecast fcf assumes a $70m drop in capex compared to 2024 as a result of Labour removing investment allowances (from $200m to $130m). I have not reduced it further as Kraken workover planned for Q1 2025 will have been contracted pre election. Reduction of capex likely much higher in 2026 if Labour remove investment allowances as currently stated.
Interesting 2025 and 2026 could be stella FCF years under a more aggressive labour policy before depletion rates start to really bite in 2027 onwards. If Labour stick with current conservative policy the capex could rise quite dramatically with progression of Bressay etc.
My gut feel is that energy policy could become a significant area of debate and differential in election campaign.
Does anybody really think that Labour will start with an anti-business agenda? Starmer is suspect (power first - ask Corbyn) but he'd lose Rachel Reeves in a heartbeat if he tried to attack investment or alienate business. O&G isn't the soft target it was even a few months ago. Miliband has the Unions (or so popular theory goes) but they {The Unions] tolerate the ideologists until it hits jobs and pay-packets; then it is a different story. Talk is cheap but it doesn't hurt to remind them what they've said. They are also highly skilled in turning 180 degrees and blaming the decision on somebody else. The word "hypocrisy" is interchangeable with "expediency" in the political lexicon. I also think Labour will want some good headlines as soon as they are elected and maybe the Tories will surprise us with some mitigation on EPL? Don't forget it is the Tories that scuppered us.
Stevo, what do you see as possibility if capex allowances removed from 2025 with a labour government?
Presume capex will fall off a cliff, and continue to harvest cash from Kraken with FPSO lease cost dropping and interest payments dropping
Also does anyone know conditions of the term loan - can it be paid off early?
I wonder if this is connected to the Telegraph story? One of the main suspects must be Viaro who own RockRose. Of course Labour may just ignore the story. Be interesting to see if the Telegraph pick it up.
"On February 8, as part of its Green Prosperity Plan, Labour pledged a “proper windfall tax” on the industry, extending the existing levy and removing investment allowances currently in place.
Industry experts have warned that would quash any new investment in the sector and see tens of thousands of job cuts."
In Iran we trust....the straights of Hormuz, all those lovely loaded oil tankers, just a few miles off shore.
Another tax disaster in the North Sea.
https://www.energyvoice.com/oilandgas/north-sea/551900/windfall-tax-job-cuts-north-sea-hartshead-resources-2/?utm_content=182331334&utm_medium=social&utm_source=twitter&hss_channel=tw-1379070162
Redb
I have Enquest FCF break even at $75 oil for 2024 and $65 for 2025. This excludes proceeds from asset sales and working capital movements.
It is anyone’s guess where oil goes in the short term (next 6-12 months). It could go higher if conflict escalates or lower if we start to see global recession as interest rate hikes start to really bite.
Sorry I was being facetious. Posters are keen to model on year highs of Brent prices within hours of them being hit but not so much in the other direction. ENQ are healthy at $80/bbl and I don't think it is prudent to model any higher than that.
I have oil at 87 now more or less?
Just wondering where everyone is asking for forecasts of FCF with oil at $75 now?
The Yanks are like lemmings, they’ve seen their beloved Nvidia go negative so that’s triggered a fall in Tech stocks and others just follow, with some commentators calling a correction on the way…not a concern for those with a stronger stomach !
Oil prices went up quick and the market was waiting for a trigger to correct it. US build but product draw so I’d imagine nothing changed and oil prices will soon bounce back
Why would that bring off the US composite markets? They're also dropping.
The Markets decided to dismiss the Israel/Iran conflict as getting any worse, but a stray missile will soon correct that.
Is it the gulf coast crude stockpiles?
https://screenrec.com/share/9m1vnZIwyV
Brent currently 86.8. Anyone know what the shock was?