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all the nonsense speculated on this board and whilst the SP falls - market knows best
Thank you, Dick.
Govt really needs to get a grip with its oil co taxing policy and think long term re attracting North Sea investment to ensure that we are not dependent on imports.
Currently they are playing short term politics and making it unattractive and could lose out long term.
No wonder talks are ongoing. JOG parties must be waiting for more clarity and potential amendments to the current policy. It cannot be easy for JOG management. So much is out of their control.
Greener - when do you see JOG making a profit that would be subject to any tax at all?
The attractions for a profitable UKCS - otherwise liable to pay EPL, as well as the standard 40% (ie 75% in total) on its UKCS profits - of farming into JOG and providing a carry of whatever amount to JOG on future development spend, are clear to see.
What is not clear - to me at least - is how any cash sum paid to JOG on the act of farm out would be either taxed in JOG's hands or treated for tax purposes in the hands of the farmer in. Tax wasn't my specialism when I was in practice, least of all in O&G companies in which my experience was zilch.
Make what you will of HMRC's guidance on the subject:
https://www.gov.uk/hmrc-internal-manuals/oil-taxation-manual/ot30021
My general approach to the tricky subject of tax - particularly since Sunakhunt's damaging interventions - is that there's a lot of development spend to be done and any farm in deal will be structured with a view to minimising the incidence of the 75% super-heist by incompetents in government focused on winning votes from the lefties and the masses generally (by being seen to punish producers of dirty carbon energy who are even worse than people already think because they're paying dividends to disgusting shareholders (the fact that the vast majority of these dividends find their way into ordinary folks' pension funds is strangely never mentioned).
Basically, a lot of profitable UKCS with limited future CAPEX in their 5 year plans should be queuing up to get a chunk of what JOG has to offer. How much they might be willing to pay is another matter. NPV10s will have halved as a result of the tax hike from 40 to 75%, because they're produced from DCF projections that set out the net cash projected to be generated over the life of whatever project is being valued. The following might help - if people don't mind putting on their thinking hats: https://www.investopedia.com/terms/n/npv.asp
How I hate what this country has become.
Good luck all - wouldn't like to be short of these shares at present (which I'm not - I added 15k more yeaterday - struck a bit early at 190 & 192.9p - who cares?. That's just a personal view, however. Been waiting 8 years (nearly) - hardly the right time to lose my nerve.................go for it, I say. Hope "ouch" isn't the end play!!
dyor etc etc
GLAL
From yesterday's annual results:
"Harbour's tax expense increased in 2022 to $ 2,454 million (2021: $213 million), primarily driven by the introduction of the EPL.
The tax expense is split between a current tax expense of $706 million (2021: $192 million), which includes an EPL current tax charge of $326 million, and a deferred tax expense of $1,748 million (2021: $21 million). Of the deferred tax expense, $1,469 million relates to a one-off non-cash deferred tax charge due to the introduction of the EPL of which $148 million reversed in the period. This arises because the deferred UK tax position on our balance sheet has been revalued from 40 per cent to 75 per cent where relevant to reflect the increase in our future tax rate in the period to March 2028. The total tax charge therefore includes a total of $1,647 million in relation to the EPL.
The effective tax rate is 100 per cent (2021: 68 per cent) materially higher than the blended standard UK tax rate for the period of 55 per cent. This increase is driven by the one off deferred tax charge associated with the introduction of the EPL partially offset by the profits from our international assets being subject to a lower tax rate."
They're not making it up!!
Whilst I'm not sure I'd use the phrase "fancy accounting" Harbour have definitely presented their accounts in a specific way to support their CEO's anti-EFL agenda. Not sure how beneficial this will be as it's a bit "obvious" to my mind. At the post accounts briefing and Q&A yesterday morning did Harbour specifically say that they would not be investing in the UK? I saw a reference but wasn't sure whether or not this was true and thus ruling themselves out on JOG?
Turning to JOG, whilst I didn't previously think that news would wait till after the Budget, once we got into March then there would be no news till after the 15th. Personally, I don't think Jeremy will announce any negative news on EFL or incentives and given his comments in December that he would make no immediate change to the EFL floor but would reflect on industry concerns may take this opportunity to introduce a floor.
Morning all.
Can someone clarify - the tax losses carried forward with JOG relate to GBA field, and can therefore avoid the 40% corporation tax on JOG, at least realted to GBA development correct? The further 35% windfall is unavoidable, so JOG effectively would pay 35% tax on pre-tax profits up to whatever the carry over from trap is?
Green energy rollout will push up POO a hell of a lot.
The US Department of Energy states that it will be necessary to double or triple the size of the US electric grid to accommodate the proposed level of clean energy, including EVs, by 2050. This is, of course, a kind of complexity.
If we are already having difficulty with maintaining complexity, how do we expect to double or triple the size of the US electric grid? The rest of the world would likely need such an upgrade, as well. A huge increase in fossil fuel energy, as well as complexity, would be required.
https://peakoil.com/consumption/when-the-economy-gets-squeezed-by-too-little-energy
I continue to ponder the possibility of Centrica being involved in any F/O. They continue their first share buy back program and they have now bought back 170m shares (initial program is for £250m) and they are being held in treasury. When they had their most recent results (16/2/23) they announced a further £300m buy back to commence when the current one concludes. Anyone fancy 5,6,7 to 1 Centrica for JOG. Not out of the question CNA will suffer WFT. What else might they do with all these shares?
I like this as it shows that the MOCs are not really into the green agenda but just saving face in the onslaught of the WEFs pressure.
On February 9 the NGO ClientEarth, with backing from institutional investors, launched a legal action in the UK against Shell’s eleven current directors individually, alleging board members had failed to prepare the super-major adequately in response to the risks of climate change and were legally accountable.
Shell is also in trouble in the US where another NGO, New Global Witness, has submitted to the US financial regulator a complaint accusing the oil and gas company of greenwashing by “lumping together some of its gas-related investments with its spending on renewables to inflate its overall investment in renewable sources of energy”.
I’ve been called worse names than a dog .Dick means well and has contributed immensely on this board and a have a lot of respect for him . On a separate note I own three dogs and as I’m sure you’re aware a dog is a man’s best friend .
I dont see how admitting that youll have less than expected is 'fancy accounting '.
NVESTORS START TO REALIZE THE ENERGY TRANSITION WILL TAKE DECADES
BY TYLER DURDEN: THURSDAY, MAR 09. Authored by Tsvetana Paraskova via OilPrice.com,
"Energy Trilemma"
Unlike a few years ago, everyone in the oil and gas industry is now talking about decarbonization and net-zero emissions. But unlike in 2021, ESG considerations are not top of the agenda—2022, with the Russian invasion of Ukraine and the price spikes in gasoline and power prices, upended the debate.
The energy transition narrative, from the industry's point of view, became part of the 'energy trilemma' as BP's chief executive Bernard Looney has put it—delivering secure and affordable energy when and where it's needed while raising investments in renewables and other low-carbon energy solutions.
According to analysts, there is a broader understanding among the public and governments that until a clean energy system is ready, oil and gas will continue to play a prominent role in global energy supply and, like it or not, we are stuck with fossil fuels for our current energy needs. Right now, fossil fuels account for just over 80% of global energy supply.
"There's a much broader push for decarbonization globally, and there's also a much broader realization that we are 'stuck' with hydrocarbons until we can achieve that decarbonization," Dan Pickering, founder and chief investment officer at Houston-based Pickering Energy Partners, told The Wall Street Journal.
"A bunch more people are saying it's going to take time," Pickering added.
James you wrote:
"Thank you for the excellent post Dick . Where would we be without you"
Clearly that hit a nerve, you must be barking James.
Key extract
The Chancellor Jeremy Hunt will deliver his fiscal update next week, and there’s a degree of optimism he may announce some changes to the EPL to make it more palatable.
DYOR
https://www.energyvoice.com/oilandgas/north-sea/488977/energy-economist-accuses-harbour-of-fancy-accounting-to-get-headlines/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202023-03-10&utm_term=Energy%20Voice%20-%20Newsletter
Clearly trying to send message to the gov, which we know. Helpful to see the context
DYOR
Thank you for the excellent post Dick . Where would we be without you .
I have two dogs actually. One is cleverer than the other. Neither is called Andrew, but the less clever of the two is called James.
JB - I'm thrilled (as a retired CA) to be called "dangerous". I've decided not to tell the wife in case it gets her all excited - I'm quite busy today and haven't got the time.
In my defence, I've been invested (based on the fundamentals and the people) since the outset (July 2015) and I was invested in TRAP for 2 or 3 years before that. Trap was a disappointment for reasons for reasons too complex to explain here and it would serve no useful purpose to do so. You wouldn't understand anyway. Virtually all my posts have carried the health warning: "imo" or "dyor" and I have pointed out on multiple occasions that O&G stocks, particularly junior explorers, are not for widows and orphans, because risk can never be eliminated. People on these boards are adults and should make their own decisions. I don't particularly gain from reading posts written by others, although the more astute posters provide food for thought and promote balanced consideration of the matters they raise. The general idea is to gain a better overall understanding of one's investments, with a view to increasing one's wealth in the loner term.
I have not found a single post of yours helpful in this latter regard. My guess is that: (i) you're not very clever and (possibly as a result) (ii) you're one of life's losers.
What bad luck.
I continue to hope there will be positive news in the timescale AB indicated - there are 3 weeks left for this to happen. Even if FO discussions spill over to April, or even beyond, it's not the end of the story, because I remain of the view that JOG offers one of, if not 'the', best opportunities for a profitable producing UKCS O&G company to mitigate the effects of the 75% tax rate imposed on the industry last year by the clowns in government.
As ever, the above is jmo.
Dyor
Calm down dictionary corner. It is what is called a typo (most likely caused by predictive text) and I’m well aware of the difference in spelling.
I highly suspect I hold a more senior, better paid position than most commenting here as well as the perspicacity to read the situation rather than following Dick like a sheep.
Can we please keep the posts on here sensible . GBA is an amazing area with huge potential . Jog are in a very good position they own 100% of the license . Oil is here for decades and in my view we are in a good strong position . Still very upbeat here !
I'm still with Dick in his suggestion that the other parties may well be waiting to check there are no further govt nasties contained in the budget before signing anything. That makes sense to me but this is still a punt for me.
Really? What exactly is Dick's type? I find his postings logical, informative, well reasoned and intelligent. By contrast there's "you're" opinion (to borrow from your own misuse of a contraction rather than the possessive) which clearly comes from someone lacking sufficient written English skills to have ever held any sort of skilled or educated role in the private commercial world. I suspect Jog may indeed be a bust, and I ascribe the current problems to the poor leadership of Benitz who was indeed a failure in the only oil role he ever had (Longreach) that doesn't automatically mean it was a mistake to buy into the Jersey story (I myself am in the process of trying to sell out slowly, that may well be proven the wrong decision ultimately, but that's my decision.) You're not somebody whose opinion I would heed, simply because your postings lead me to believe that you're not really credible.
So, you 'in' or 'out' at present because I don't get your reason for spending the time you do undermining it if it's the latter?
Been in and out of this share a few times over the years and learned the lesson, that’s all.
"Dick I’ve seen your type on almost every AIM share".
JB, that's a bit rich coming from you, especially bearing in mind your constant attempts to undermine a share which you profess to have no interest in? If ever there was a "type".
Dick your dog isn’t called Andrew by any chance ?
Dick I’ve seen your type on almost every AIM share.. you’re over confidence is dangerous IMO and you fail to properly consider the risks even when it defies logic. Look at HBR yesterday… the North Sea is not a good proposition right now irrespective of all the tax / loss write offs it’s fundamentally now messed up from making decent money on oil extracted and sold. End of.