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Fair bit of repetition from the last update from Arden. The headline of the note is 'windfall tax update - GBA remains attractive.' and the key statement is that 'overall we do not expect these changes to have any major impact on the farmout process'. There is a bit of rounding in the unrisked number, but the target stays at 700. Given they are the house broker, there is nothing that goes against DU's point of the farmout being marked for 2022.
IMHO
Agree re: hinging on tomorrow (and medium term change of government), however - if you play this out there is a clear argument that says that tax revenues are better re-invested into development (rather than sunk) - This way you at least give yourself a chance of getting something back in the future. Many producers are committed for some time due to existing production, even with thinner margins. Whilst I recognise that the government will most probably hike the headline EPL rate - it seems logical that they will hold the relief (there has been very little press on this changing, and the little press there has been has implied that they will maintain the status quo). This way they address their 'energy security' narrative. Many producers, I am sure, will say that they dont want to invest, however in reality it's the only game in town. Given few will abandon station immediately, it would make sense to put their tax into capital development.. otherwise they lose it..
IMHO
https://www.ogv.energy/news-item/uk-north-sea-energy-review-october-2022
https://on.ft.com/3t83nc8
I suspect we need to look beyond the 17th
DYOR
https://www.malcysblog.com/2022/11/oil-price-chariot-copl-gran-tierra-and-finally/
Note the comment on the other workflows
https://on.ft.com/3h8W2pT
Worth a read, bit of narrative from the FT on Dick's comments including the super deduction. There is no reference to them changing it
I am also firmly on the bus, although thinking that the November statement from the government has to play out pre news (hopefully I'm wrong too!)
DYOR
Dick/PC et al
Any thoughts on the potential revision? Clearly the uncertainty and delay to mid November is unhelpful, but I am assuming that they won’t touch the ‘capital relief’, just potentially the rate of the tax itself (so even more relevant to invest, if majors stay around) and the length of time it applies for. I suppose my only worry is the uncertainty it creates for the industry around a stable predictable tax regime.
Would be interested in your thoughts ‘ views on how this may impact events, especially timing.
Still very pro jog my side, and firmly on the bus with a decent seat !
DYOR
Very respectful of your posts bullson and FWIW I agree - I think you are objective and your historic posts clearly reflect that..
IMO It would definitely be reassuring to have a further update, however I am also mindful that they are hopefully nearing the end of agreeing the format/approach with (a) partner(s) + the commercials and therefore probably cant say a great deal right now (beyond what we already know), until the deal is 'inked'
I had a re-read of the broker notes from earlier this year (April), which were based on the last farmout update. The WHI note in particular was clearly guiding toward end Q3/Q4 for a farmout in terms of timing the cycle (worth a re-read). Simon T also picked up on something similar in the IC, in his April note to readers (stating FO later this year). This felt like a subtle change of language from both, and may well have been influenced by the new BOD ?!?
August is always quiet.. however it's nearly September (end of Q3)
DYOR / IMHO - but I think just a little more patience required.... although hopefully not too much ;-)
Normally these schemes fully vest on a takeover (although varies of course depending on the scheme rules)... it's an interesting point though Nordell.. There been a lot of chatter about takeover on this forum over the last 8 months, and with the amount of news due flow due imminently you would think that Char would be an attractive target.. I wonder if the timing of the issue is part intentional ahead of the forthcoming news release (ensuring that if there is a take-over, that they appropriately benefit and have significant skin in the game).
Well said. I also agree with the earlier comment as well around sincere gratitude if they deliver. They will have mine too.
A management team heavily incentivised to deliver over 23/24 and 25 is what we need. They only receive the award if in office and the vesting is evenly distributed over 3 years - , therefore things have to be broadly on track over this period.. an accretive share price is materially in their interest..
My view is this aligns them well to shareholders. I have no problem with this, in fact I actively encourage it and feel quite upbeat about the effort and life they are going to no doubt relentlessly commit to delivering the best possible outcome…
AIMHO
https://www.investorschronicle.co.uk/ideas/2022/07/26/profit-from-the-european-energy-crisis/
DYOR
https://www.investorschronicle.co.uk/ideas/2022/07/19/slick-operators/
There is also the link to his last April article highlighting the value to still be realised
A useful reminder for many …
DYOR
Nothing new, but re enforcement that there are a lack of options to create energy security, which can only enhance the case for JOG
DYOR
https://www.energyvoice.com/oilandgas/north-sea/427021/north-sea-exploration-prospects-few-and-far-between-edinburgh-disappoint/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202022-07-14&utm_term=Energy%20Voice%20-%20Newsletter
Suddenly there is a lot of m&a or proposed m&a happening in the North Sea. Whether these happen or not, is not the point … but more that it feels there is more interest and activity than there has been for quite some time.. !
https://www.energyvoice.com/oilandgas/north-sea/426589/serica-energy-knocks-back-merger-proposal-from-andrew-austins-kistos/
https://www.energyvoice.com/oilandgas/north-sea/426580/waldorf-enters-agreement-to-buy-north-sea-upstream-firm-alpha-petroleum/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202022-07-12&utm_term=Energy%20Voice%20-%20Newsletter
DYOR