I think Madam Kim must have had a ghost writer because I sense that - despite her death - the same hand is behind these management descriptions.
Unfortunately, Labour's current policy is to scrap the additional capex tax offsets. So in 2 years' time you could be facing 70% without the additional mitigation.
But it isn't tied to energy prices. If oil falls to $75, do you think they will cut the tax? Not a chance.
Tax rate from 40% to 70% in 6 months. Yes they've increased the capex deduction but brent isn't even $100. CAPEX will be so much lower than it would have been.
Again, they need to come out and says this will cause a fall in investment and production and therefore cause higher prices for longer. There's zero public pushback from the industry.
They need to tell journalists that as by far the largest north sea producer, if the windfall tax is increased then they'll cut capex and production will fall. It'll probably hurt the stock but otherwise why wouldn't they increase the tax? It's politically popular, raises revenue which they're very keen to do and there's no one saying they'll stop investing. It looks like win win win to them.
They need someone to point out that it'll cost them. Harbour are uniquely placed to do it.
I wish they'd leave the UK. They have almost no production here but the media fixate on their profits because they're "UK" and then ignorant people say WINDFALL TAX WINDFALL TAX WINDFALL TAX. Just become US companies and be done with it.
From the FT:
"Meanwhile Hunt is likely to extend the government’s windfall tax on oil and gas producers beyond its “sunset clause” in 2025, helping to close the fiscal hole in the next parliament, according to people briefed on his thinking.
The current levy is scheduled to raise at least £28bn over three years before it ends in December 2025. Extending it by two years could raise more than £10bn for the Treasury, but much depends on future energy prices."
There's speculation that Hunt will extend the windfall tax end date. No idea what evidence - if any - there is to support the speculation but that is what is going around.
Could turn out to be better than the alternative of Labour creating their own system after 2025..
If I were Harbour I'd buy Tullow's bonds. If they keep paying the interest+maturity then Harbour gets a very fat return. If they don't Harbour gets the company on the cheap.
The hedges destroyed the upside. The debt is massive. The bonds are trading at 65 cents on the $.
Ukraine is in talks with US drillers to pump gas from its vast untapped reserves to Europe and ease the region’s energy crisis by the end of the decade, The Telegraph can reveal. Naftogaz, Ukraine’s state-owned oil and gas giant, is preparing to market its national gas reserves, the second-largest in Europe, to international drillers and is already in discussion with US firms. A move to prise open the reserves could help Europe find new sources of gas once the war in Ukraine ends and help countries shift away from more expensive liquified natural gas (LNG) imports. The company has identified huge gas reserves waiting to be tapped, including in the Dnipro-Donets Basin. Myron Wasylyk, adviser to the Naftogaz’s chief executive, told the Telegraph it has held discussions with US companies about joint agreements to prise open the reserves. Naftogaz “soon will be marketing some of the projects”, he added. Mr Wasylyk said: “We have a number of resources and gas reserves there that are basically the second largest in Europe. There is exploration potential there and also export potential there. We estimate there could be up to 40 billion cubic metres. “There is a lot of potential there but it won’t come online until the second half of this decade… We have a number of basins which are currently undeveloped.” He said tapping the reserves would “absolutely” help meet Europe’s future gas needs. Europe is scrambling to find alternative supplies following Vladimir Putin’s invasion of Ukraine. Tapping the reserves in Ukraine will likely depend on the direction of the war, though its army has been retaking huge swathes of territory from Russian forces. The bulk of Ukraine’s gas production and reserves are east of the Dnipro River, which cuts through the centre of Ukraine. Russia supplied around 40pc of Europe’s natural gas before the war but the Kremlin has been choking off supplies ahead of what threatens to be a bleak winter for the region. There are fears the shut-off could spark power shortages this winter, though gas prices have fallen in recent weeks after a successful drive to boost storage levels. Benchmark European gas prices have more than halved to €145 per megawatt hour since peaking in August. Prices have fallen thanks to successful efforts to cut energy consumption on the Continent and as European gas storage levels have risen above 90pc. However, experts still warn that much will still depend on Europe avoiding a particularly cold winter that forces households and businesses to turn up the thermostat. Figures from think tank Bruegel suggest gas imports to the EU and UK from Russia are down by more than 80pc in recent weeks compared to a year ago. Meanwhile LNG imports are double 2021 levels and are on track to hit record highs in 2022. LNG is more costly compared to the cheap Russian gas Europe is used to. Analysts have warned gas prices are likely to remain high this winter despite recent falls.
Having ~60% of the market cap in cash is obviously ridiculous. Makes it incredibly easy for the management but does nothing for shareholders.
Morocco & SD have been financial sink holes.
They tried selling the company. The offer - apparently after lots of effort if Malcy is to be believed - was not good.
Aleph don't seem to want to run down the assets.
That really only leaves an attempt at acquisitions. We should certainly hope that's the plan anyway. Punting on more drills in Morocco or SD will likely incinerate more cash.
Egypt is having big dollar issues at the moment. We'll see if it affects payments to SDX.
I don't think there's any danger of financial distress here.
The share price is no limit on the amount they can raise because they can issue an infinite number of shares.
One thing I haven't seen mentioned: They've borrowed $2.5M so they now have total cash of $15.27M. I wonder why they've done that.
Getting close tor my repurchase price of 8p. Malcy's view seems reasonable:
"As Mark says in his comments above the operational performance has been pretty good with the one exception at West Gharib. He also says that it has been overshadowed by corporate activity.
I would contend from what I know about the company being touted around for the best part of two years they are well rid of the previous major holders and are hoping that things are about to change. Let’s hope that Aleph have the cheque book out otherwise it will more of the same."
It's all macro.
they haven't paid out the money