RE: Petrofac sale before Xmas7 Dec 2025 11:29
There seems to be three decent near term plays, the question is whether you jump on the first one or wait in hope that you get the right one without too much competition. Getting the deal that fits best without too many liabilities or costs to integrate has to be a priority, whilst minimising any increase in debt or future capital outlay. The driving priority is to gain producing assets where they are the operator to make best use of management skills and tax losses.
I suspect there is more competition for the UK assets than might expect given EPL etc. Basically anyone with cash to burn who is prepared to bet on EPL being lifted sooner rather than later and POO may be heading to the bottom of the curve, whilst NZ targets are moving to the right. Having said that, Starmer's EPL performance this week suggests that EPL and its implications are not understood by senior politicians within the Government. Our champion may well turn out to be any leader of the Scottish Parliament and with the Scottish elections just 20 weeks away, the NS O&G is likely to be a polarising difference between all parties and Labour and perhaps the Green's, although some elements of the latter appear to have some recognition that O&G is part of any renewables transition. A change in the coming days or weeks at this stage is unlikely, simply because the opportunity and timing was with the Budget.
As I have said before, if the right assets fall into ENQ's lap, all well and good, but not at any expense and without a decent fit into the portfolio. ENQ is managing and has the financial capacity to manage its way through both EPL and low POO, plus has plenty of opportunities for organic growth, decommissioning opportunities and expanding its ASEAN portfolio.
It is a shame you can't make a legal case against Starmer for incompetence given his utterances on EPL and I still think there must be a legal angle on the confiscation of NS O&G profits and putting companies into administration through punitive taxation on one singled out industry.
If I were a big business with a good idea - would I invest in the UK - No! Why not? Partly high energy, taxation, employment and overhead costs and partly because if it was a roaring success, what is stopping the Government putting a windfall tax on it?
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