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Probably
Is this all down to yet another tip from ST - where each time the price goes up, then drops more - or is there something concrete here?
Also followed his tips on AA4 which seems a little less risky given 19% yield and 60% discount to NAV
Https://www.unitetheunion.org/campaigns/oil-and-gas-no-ban-without-a-plan
Interesting. Growing pressure for Labour to clarify policy before the election. I think the political cost of doing it is low.
Double frothy tip from SC and ST. Buyers well outnumber sellers, which is a good sign the over hang has cleared. Either that or Nick Robinson is on holiday and out of reception.
Is this normal?
Https://masterinvestor.co.uk/evil-diaries/evil-diaries-various-speculations/
Re- DU - re politicians present and going forward.
Ms Atkins - absolutely agree - she is ghastly - as though she knows she is way out of her depth, but determined to maintain her personal position, she utters the words that have been scripted for her to maintain her position.
Politicians General: Again I agree ; Ignorance, self -preservation, and malice seems to be the order of the day.
Because I worked for a City company for a long time ( not as a professional finance person) I became interested, reading lots of stuff on City pages, money advice columns, etc, and have done 'reasonably ' on investing
Have done the 'right' things, ISA's, diversification of investments, successful momentum investing ( i.e. reading what's on the move and getting in even when 'up' has been well underway and making profit).
Feel I have done - 'satisfactorily' - maybe very marginally better than that.
Over the same period a friend who inherited some money took the view that he knew nothing about investments and really found it all too confusing and he bought ( for his own 2nd use and investment) a small newly built house on a
development on the Essex coast in what was once a very small industrial area - not particularly fashionable.
He's way ahead of me on profitability, and despite the fact all future governments are going to be getting their claws into 2nd home profits, given the levels of immigration and the impact on house prices - maybe that is the way to go - especially if one opts for a rental income.
I'd take £5.60 as well. Me too - in a heartbeat
Thank you for that information Dick.
I'd take £5.60 as well.
CHF - SQZ has significant b/fwd tax losses acquired when it bought Tailwind Energy, but whether or not they'll still be available when and if Buchan gets to production in late 2026 - assuming it does - is another matter. I doubt they will be as SQZ is quite profitable - not that it gets to keep much of the profit. Not sure about HBR - can't recall tax losses being a feature.
JOG has losses of £65-70m that can be offset against future profits from the same trade. I have factored these into the DCF projections I used that got me to a NPV of around £4 a share. I used very conservative (no pun intended) assumptions in my calcs.
If Buchan does get to production, then using the most recent evidence of what 2P reserves are changing hands at ($10pb), if JOG ends up owning 25mmboe of 2P reserves in Buchan, in simple terms it would be worth $250m. Divide that by the number of fully diluted shares (c.36m) and you get to $7 per share - 560p.
I'd take it
Thanks for the education Dick .
Do JOG, NEO, or Serica, have any other tax allowances they can set off against income other than the Enhanced Investment Allowance ?
You're missing the point, CHF.
With the enhanced investment allowance, spend on infrastructure on new projects (like Buchan) can be carried out for a fraction of the cost. Tax relief @91.4% on £900m of spend?
" The introduction of the energy profits levy was accompanied by a specific investment allowance, which gives an additional 80% deduction against the levy for qualifying expenditure. When combined with the existing regime, this results in tax relief of 91.25p for every £1.00 of relevant expenditure".
Labour calls it a "loophole" and intends to withdraw the allowance, at the same time increasing the tax rate to 78% on all profits made by UKCS producers - not just the long gone windfall gains).
It is one the most dishonest tax I have ever seen imposed. Every bit of the legislation is fundamentally flawed and is dishonestly presented in all official descriptions of what it is. It's funny how no reference is ever made to the windfall losses the entire industry suffered for years, as a result of the political spat over market share, followed by Covid.
Here are a couple of examples from the .Gov site:
https://www.gov.uk/government/publications/changes-to-the-energy-oil-and-gas-profits-levy/energy-oil-and-gas-profits-levy
"There are not expected to be impacts on individuals as this measure only affects businesses".
" Victoria Atkins MP, Financial Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure" (who TF is Victoria Atkins and what does she know about the O&G industry - about anything in fact):
"Victoria Mary Atkins was born on 22 March 1976 in London. She is the daughter of Sir Robert Atkins, a former Conservative MP and MEP, and Lady (Dulcie) Atkins, a Conservative councillor and mayor. She was diagnosed with Type 1 diabetes at the age of three. Atkins was privately educated at the Arnold School, a co-educational independent school in Blackpool in Lancashire, and read law at Corpus Christi College, Cambridge.
Atkins was called to the bar (Middle Temple) in 1998. She worked as a barrister in the field of fraud in London (ah - I see now - she's good at fraud) and, best of all:
"This ensures oil and gas companies that will benefit from the prolonged period of increased prices continue to pay their fair share of tax".
Sushi stated about 4 months before stealing a policy he thought would be popular with the masses etc: "windfall taxes are not something the Conservative Party believes in". This was in response to a Labour spokesperson saying Labour would impose a WFT of 10% on the gains made from increased O&G prices, with the WFT being scrapped when prices returned to normal.
What more can one say about politicians and integrity?
dyor
The current gloom still leaves some questions one of which is why Neo and Serica went ahead with their Farm-Ins if future prospects were so bad due to government taxation.
The EPL 12 month time extension in the 2024 budget and Labour’s announcement they will extend the rate from 75% to 78% years look like a very MARGINAL further deterioration in prospects for oil companies, and insignificant compared to what came before and very unlikely to change how oil companies view their prospects.
The previous change was the very SIGNIFICANT hike (surcharge 25% to 35%) from 65% to 75% was announced by Hunt in the 2022 Autumn Statement and its lifetime being extended from Dec 2025 until March 2028.
That was a hugely significant negative change AND YET :
Long after that tax regime was put in place, firstly NEO in April 2023, and then SERICA in November 2023 announced their FARM-IN deals with JOG.
Both NEO and SERICA obviously knew what the existing ‘ MAJOR NEGATIVE ‘ tax situation was and the further ‘MINOR NEGATIVE’ change of its extension for another 12 months and Labour prospects of a further 3% hike could hardly have changed the BIG PICTURE for these companies.
So its hard to see why these two companies would duck out of FID having dived into FARM-INS,
since their taxation prospects since have not greatly changed.
Does this mean I should buy more? Have done so twice on Thompson's "advice"... not serving me well so far!
Maybe I will dribble a bit more in
Which House were you in? I was CWW. FE
DU! You go too far sir. The Uranus Long Term Brilliance Fund is a top performer, that we can all get behind. I know the manager Hugh Janus extremely well, we all got behind him at Eton.
I hope you're right about something in the offing that will persuade NEO and SQZ to go ahead with the Buchan project, Greener.
But I can't see how "Super-tax allowances" on money spent on wind-farms will do NEO and SQZ much good as I don't think Buchan will be regarded as "green". I know the "Western Isles" FPSO vessel will be designed to allow "hook up" to a renewable (electric) energy hub that Scottish Crown Estates are planning to build in the Moray Firth. If the past is anything to go on, they'll still be planning it 10 years down the road, when most of us will have long since ceased to have any interest in any company registered in the UK, because they'll all be regarded just as money pots the government of the day can tap into to raise extra dosh to dish out to people the UK is now full of - people who've spent every last penny that's come their way (a lot in welfare payments and from the black economy) on themselves, without any thought of rainy days in the future.
That's where we come in - and the companies we have invested in until now (in my case at least). To pay for it all. I'll see out my present oil plays then call it a day on investing in the crooked markets governments rely on to provide it with money stolen from people's pension savings via the crooked practice known as "shorting".
Most people investing in funds run by pension providers have no idea about stock lending and the harm it causes them. They have never given their consent to shares held in fancy-named funds (Uranus Long Term Brilliance Fund etc) being lent to hyenas like investment banks and hedge funds to make a fortune out of.
HMRC can't tax people's savings held in a pension "tax wrapper" like ULTBF, except via tax on dividends that could be reclaimed before Brown decided he'd rather like to lay his greedy socialist hands directly on £6bn a year previously belonging to pension savers - funny how the Conservatives never reversed this scandalous act of theft.
The trick is to allow stock lending by pension providers, without the beneficial owners' express or even implied authority. The provider doing the lending (of shares owned by people saving for their retirement) pockets the generous fees. The borrower makes a fortune out of selling the borrowed shares and buying them back at lower prices caused by dumping the borrowed shares on the market, or more slowly over a longer period to cause MMs to drop the price to encourage buyers. The borrowed shares are returned to the lender, who tucks them back into his fund at much lower prices than they were when they were lent, claiming it doesn't matter because he's investing for the long term and short term drops in SPs don't matter.
HMRC wins by taxing the indecent profits on the crooked exercise made by the investment banks and London-based hedge funds. It also taxes the 7 figure packages their employees are on.
The losers? People saving for their retirement.
Nice one
What you say is quite true, DU. Don't disagree. But something is afoot behind the scenes. I have heard from another industry source that Lab wants to work with industry to fund the energy transition. Ithaca CEO said the same thing. I don't know what form it will take. The obvious choice is that either green oil is less taxed, or profits spend on windfarms are deductable.
However laughable we find windfarms, if the project goes ahead, and suddenly has its entire untaxed cash flow available to spend on green oil projects or renewables, that's 100s of millions of pounds.
The company will be worth a lot more than 145p.
Something is afoot behind the scenes
Greener - I don't disagree with your sentiments. But my experience is that politicians rarely back down, regardless of the harm their policies might cause the Nation. Their personal position and that of the Party they represent (in that order) always come before the long term good of GB.
Because oil & gas plays out in decades, politicians won't have to deal with the fall-out from destructive short term policies they put in place - that's for someone else to fix. We've been there before, but no lessons seem to have been learned. The industry is slow to forgive politicians. There'll be no coming back this time. The NS was dying anyway, now it's all but dead - and it won't be doing a Lazarus anytime soon. Brown and Osborne both increased tax rates on tax on oil & gas cos' profits (2008, Brown - to 60%, then 2010, Osborne - to 62%). Tax revenues from the NS dried up altogether, but it took a few years.
https://www.statista.com/statistics/350890/united-kingdom-uk-north-sea-revenue/
Things became so bad that a new quango was set up (called the OGA, today its the NSTA) whose sole mission was "MER" - maximise economic recovery: IE - increase the tax take from the NS.
Around 2014/15 the spat developed over US fracked oil taking a 4% world share without asking for OPEC's consent. Fracking was feasible with oil prices at $100+ with extraction costs of $70-80pb. F*** off, said the US. The Saudis (sorry - meant OPEC) with extraction costs of $6pb and 30 years' worth of SA's total annual GDP sitting in its coffers in different currencies turned on the taps and flooded the world with oil. In the end no-one wanted it except China. BC fell to $25pb. F*** off back with knobs on, said the Saudis. More than half the new US fracking fields shut down. Billions were lost by US banks. Then it was Covid
Losses to HMRC in tax on much reduced or non-existent profits were immediate . The result was as the graph shows.
Now they've gone and done it again. The industry will NEVER forgive Sunak's blatant move to steal what he knew would be a Labour WFT he thought would be popular with the masses and raise some easy cash in the process - and buy himself popularity.
Sunakhunt was so dishonest, however, that it imposed a tax on the entire profits of all UKCS producers. He thought the thickos (like the BBC) would never be able too work it out - a tax on windfall profits only (deceitful b'tards. And what profits? Oil prices were back to normal market prices after 8 months). A dishonest floor price scheme was then set up to ensure the EPL would last 8 years, by including the US vs OPEC and Covid years (when prices were rock bottom) in the 10 year or whatever period used to establish historically "normal" oil & gas prices.
Dishonest & rotten to the core. All of them, esp Sunakhunt. The hopes and aspirations of 100k families in GB in tatters, as the skilled provider loses his job? Just collateral damage. Votes are at stake.
Utterly despicable
dyor
Crystal balling it that far out is a mistake in my view. All sorts of things could change: greater destabilization in global security picture. Economic slide that forces need for more jobs, Tax and balance of payments urgency. Another energy price spike. Inflation and cost of living could start to be blamed on greens - we know heat pumps are the saviour, nor EVs. Food prices. unemployment increase motivates the unions. etc etc etc.
Literally anything could happen, but typically you get 'reversion to mean' - we're as bad as it gets! DU is right that it's crazy to sell at 145p. atmosphere can only improve. We are close to the puke point I think.
Encouraging - but as DU points out:
"there'll be even more Greta Thundertwats than ever by 2030"
Https://www.energyvoice.com/oilandgas/north-sea/exploration-production/553468/ithaca-cambo-decision/
...last paragraph
DU - why then did Serica farm in, and is Neo keeping development going? I think you have to work on the basis that Labours hand will be forced by the rapid decline of NS.
Serica closed the FO and paid multi millions in full knowledge of the statements made by Ed.
PS I do not except JOG to want to fund a windfarm.