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I think we should start seeing leaks at any point now regarding any changes to EPL. FT reported yesterday that apparently Reeves and Starmer were meant to be finalising and signing off on the various Budget measures yesterday, to then send to OBR for OBR to do their thing (which OBR I think releases on Budget Day). So any and all decisions should now be internally decided. My fear is with the latest No. 10 leadership drama, they get cold feet over raising income tax and breaking manifesto promises and illogically conclude they need to keep EPL intact.

The % is applied to the stake sold, not the entire field!! 150m pa is way off

Company language has shifted. “Evaluating a range of options” is PR speak for shareholders will be getting punched.

Think the question now is all about how much dilution we’ll get hit with. Hopefully it’s not a 100% wipeout. Hopefully more like max 50%.

Sekforde was correct in that I did omit the Magnus payment, and my cash interest was off. Using $71m cash interest and adding in $45m for Magnus, takes my 2025 cash demands to $982m and a breakeven of $64.73/bbl.

Anyone got access to this which they can post in full?

“Government policies have made UK North Sea oil and gas “largely uninvestable” but removal of the Energy Profits Levy could prompt investors to reassess the region, R Blair Thomas, chief executive of institutional energy investor EIG told Upstream on Tuesday.”

https://www.upstreamonline.com/politics/uk-north-sea-largely-uninvestable-says-eig/2-1-1885668

And Asian production will potentially be ballooning by end of this decade. The big question I want answered by the company is what sort of capex should we be expecting in order to get that on stream.

Estimated ENQ cash demands for 2025:

OPEX: $450m (as per guidance)

Lease cost: $57m (reflects 70% reduction from April)

Cash taxes: $120m (as per presentations and accounts)

Cash interest: $30m (ditto)

CAPEX: $190m (as per guidance)

ABEX: $60m (as per guidance)

That totals $907m. Producing 15.4m boepd equates to a cash flow breakeven this year of c. $59/bbl. Assumes changes in working capital are zero. There you go Sekforde….evidence of positive FCF with POO in low $60s. My figures show ENQ generating FCF of c. $125m this year. And as previous stated, bonds are trading strongly. Hilarious for anyone to think ENQ is going bust anytime soon!

FCF breakeven should reduce further next year with full year effect of lease rate reduction and any positive change with the EPL theft.

HBR has since end of 2023 entirely used up its UK North Sea tax losses - its NS assets pay the full 78% whack. Combine that with the decom liabilities, its NS business can’t be worth very much right now. How nice it is to think that if these ended up in the hands of ENQ the hundreds of millions of £££ per annum which the Treasury would be deprived of. It would be poetic justice.

Erm…they are the ones who introduced it, so….they don’t get my vote

EPL reform/cancellation will happen, and soon. Trump will make sure of it.

It’s simple. Given timing/phasing of spend and proceeds across the year, the important number is the year end guidance for net debt of $1.1bn at $65/bbl Brent.

Yes, but also need to add in the 2C value. 2P at around $10/bbl somewhat punchy by industry standards but also depends on fiscal regime. Need to also add 2C at around $2-3/bbl.

Vote Reform. The UK doesn’t have a single credible political party, but at least Reform are the least bad option. I once voted Lib Dem many years ago. I once voted Tory as well. I once voted for none of the above, defacing the ballot instead. What this Pippa c**t has come out with is mind boggling. I looked her up yesterday when I first saw this in Energy Voice. Of course nearly her entire career is as an eco zealot climate campaigner. So no surprise. The UK is so screwed. If Andy Burnham gets in, then even more so. IMF bailout incoming very soon if pragmatism doesn’t soon prevail. I loathe Trump but thank goodness for his golf courses/personal vested interest in the greater Aberdeen economy :-). Am utterly convinced he will force Starmers hand of the NS fiscs, regime. Drum beats are getting louder. Would be gobsmacked if NOV budget does not see a policy reset.

A debt for equity swap??? I think hell has a greater chance of freezing over. Leverage is only c. 0.5x and it’s only a few hundred million $$ outstanding. I mean ok, it’s a risk, but maybe on a probability of 0.007%.

…”with a decent divi”…

We don’t know if there is a decent divi - it’s ambiguous. Was the $15m divi earlier this year a one-off? Is it intended to pay that sort of level on an annualised basis? Or should we think in terms of an interim and final divi? Until a deal transpires or EPLis abolished/modified, I suspect the dividend quantum will be throttled back and the company may have to remain ambiguous on shareholder returns.

“Sir Keir Starmer tried to move Ed Miliband out of his energy brief and into the housing department but the former Labour leader refused, it has been claimed.

The Prime Minister carried out a reshuffle of his ministerial team last week following the high-profile departure of his deputy, Angela Rayner, with several key figures shunted sideways or demoted.

But when Sir Keir asked Mr Miliband to leave his job as Energy Secretary – overseeing the Government’s net zero policies – he “refused” and successfully held on to his post.

“This appears to have been the one part of the reshuffle that didn’t quite go Starmer’s way,” said ITV political editor Robert Peston, who first reported the claims.”

From today’s Telegraph. How bizarre, I mean who works for who.

Such a shame

TotalEnergies has said that uncertainty over the outlook for the fiscal and regulatory regime in the UK North Sea will limit its investment in the region.

“To invest you need the environment to be an environment of trust, of visibility, of certainty,” said Nicolas Payer, managing director of TotalEnergies E&P UK.

“Today the conditions are not there.”

https://www.upstreamonline.com/production/totalenergies-says-conditions-not-there-for-uk-north-sea-investment/2-1-1866674

Been quite a flurry of pro-North Sea articles and press in the last week. I expect this to only increase in the coming weeks and months in the run up to the budget.

I am cautiously optimistic that momentum is building and the tone is shifting and common sense will eventually (soon) prevail.

I mean my gosh, for even the Guardian to publish a pro-NS piece is telling.