Member Info for AIMOilking

Krak, I have also added this week as I am convinced, like you, that their will be changes to licencing and EPL, however, I was wrong about the increase from 25-35% EPL, although the lift to 38% was no surprise once Labour proposed it. If I thought the Conservatives were going to be so stupid I would have bailed out of the NS completely but that is with the benefit of hindsight. However, in the hope that the Government would come to their senses, I have averaged down, so should benefit and recover much more quickly with an sp upside.

The elephant in the room alongside my hopes is the POO............! Whilst I think POO will range in the US60-80, if it drops much further it will make ENQ MCap/Sp recovery much harder, but there again O&G investment will decrease across the World and we'll see US$80's by the end of '26/'27. In all this, Trump's sanctions and Russia's situation will play a large part in the POO in the meantime.

I was struck by Millibrain's language in this article: https://uk.news.yahoo.com/kemi-badenoch-just-reform-tribute-084629293.html

The repeated us of "war" and "anti" smacked of desperation and the thought the phrase "Reform Tribute act" was interesting, whilst it degenerated the Conservatives, it also promoted Reform above the Conservatives as a threat. Millibbrain's claims also were a little thin in terms of Net Zero benefits whilst being quite agile in avoiding the various "elephants" associated with achieving Net Zero, preferring to go for the moral high ground. I think a staffer must have spent quite some time crafting the response, probably intended for Reform but used against the Conservatives with their change in policy.

I think Millibrain is cornered and rushing for the morale high ground upon which arguably you cannot put a "subsidised price". Perhaps Reeves and Starmer are going to make a shift on North Sea O&G with the November Strategy review following the consultation on EPL.

Given how corrupt politicians appear these days, I am going to watch NS O&G company trading volumes, if they start picking up at the end of October/November perhaps we might hear some good news as I am sure those in the know will be unable to resist making a buck and telling their friends if there is any substantial policy change in the "wind".

AB seemed quite positive about a policy change, but the nodding heads can appear to be listening to reason but that does not mean that common sense will trump their priorities, agendas and personal interests.

Apart from fleeting dips into the 10's last October and December, we are now at the LOWEST sp since 13th November 2020!

Given the debt repayment since then, the Asian assets and prospects, one small dividend and buy back of almost 3% of the shares (not all were cancelled), it gives you some idea as to punitive impact successive Governments' taxation and policies have had on ENQ's sp and the NS O&G industry.

Whilst ENQ has paid down roughly US$1,200,000,000 in debt during that period, about 50 pence per share, and before tax has made billions, after tax is another matter and would appear to be a couple of hundred million loss over the same period. After making all this money for the Government, it is no wonder the ENQ MCap is ridiculously low @ £200m.

Apologies if I have my figures are not totally accurate but the magnitude of this Government inflicted tragedy on ENQ, NS O&G industry and long term shareholders is apparent and utterly appalling.

Hopefully common sense will prevail, because at this rate I am not sure I will be able to afford the paint for a placard and the train fare should there be a rally in Westminster in support of the NS O&G industry............!?

I made this point the other day - ENQ has said it is within its production forecast for 2025 and the Vietnamese 5k production is helping. Given the reported production for H1, production and revenues (POO dependent) should be much higher in H2, plus the full lease cost savings will apply, so I would hope that ENQ would be more cash generative H2.

I am expecting a more positive update in 7 weeks (last year 20th /11) and full year results, although it would not surprise me if it were delayed to the beginning of December. By that time, our "friend" Milibrain (he used the term friends profligately during his speech which smacked of desperation) will either have gone or bowed to the pressure of the rest of the Cabinet and the results of the consultation, now widely touted strategy paper before the budget.

I have said many times before, I would much rather see organic growth than a bad deal, in this respect I trust AB to do the right thing which may be to be cautious in the UK environment.

Stevo, thank you for your response, it makes a little more sense now.

The question now is what is next for ENQ if we are being beaten to the deals and EPL does not change............I hope the Asian assets come on line quickly!

I can't wrap my head around the Serica deal - £26m for all those assets, production and tax losses, apparently reasonable decommissioning liabilities - did no one else bid? Was there no competition or at least a stalking horse? Something does not seem quite right? I have to say the body language of the Serica team did not quite exude the gloating that one might have expected whilst at the same time being bullish about more acquisitions. I got the impression that they were still mulling over what they had bought and how they were going to integrate a dramatic increase in employees and various assets.

Is AB keeping his powder dry for the Waldorf assets or more overseas deals or a bigger deal?

I believe Prax has significant EPL tax and decommissioning liabilities, probably sensible AB gave this deal a wide berth.

"A senior union leader today suggested Keir Starmer needs to sack Ed Miliband and bin his Net Zero zealotry in order to get Britain making things again.

Unite general secretary Sharon Graham hit out at the Energy and Net Zero secretary over the closure of two oil refineries - Grangemouth in Scotland and Lindsey in Lincolnshire - in less than a year."

Firstly, if ENQ is to hit mid production target for the year of 42,500, then ENQ would need to pump an extra 8,400boed in H2 which @$70 equals an additional $107,000,000 of revenue less some tax. If the top end of the target were to be hit that would be an extra $64,000,000 of additional revenue less tax.

In addition, the full benefit of cost cutting and reduced lease rates would come into play.

Now the questions I am really interested in are:

What would the share price be if Eddy announces open season on in-fill wells - any guesses?

What would the share price be if Rachel cancels EPL and replaces it with say 38% tax on any revenue above $80 a barrel (linked to inflation)?

I would welcome your thoughts as Millibrain should be speaking at the conference as I write.

Clearly, Trump's overtures to Putin have failed and Trump's ego has been dealt a continued blow as the Ukraine War continues making his claim to end the war in 24 hours even more ridiculous. So no juicy deals with Russia and in the meantime, Russia's influence is increasing with the axis of evil. Trump's policy was to drive POO down and sanction Russia to bring Putin to the table, this has not had the impact he anticipated, so now a change in tack by putting tariffs on countries that take Russian fossil fuels which despite sentiment suggesting there will be a glut of oil, these actions will drive up the price of non sanctioned oil, which will in fact bring greater prosperity to America and probably help the Middle East remain more stable. On the other hand, Europe will increasingly become beholden to the US which will massage Trump's ego whilst reducing US costs with NATO, increasing arms sales and placing Europe again in the frontline to deal with Russia if the situation blows up into a full scale war.

What ever you say or think about trump and the way he plays his cards and having no regard for conventional diplomacy, which has generally failed us all, he does play the odd blinder and when you think about it, the US's influence is waning and playing hard with the remaining strong cards does have have a high degree of logic about it.

In summary, if Trump plays hard ball with Russia and particularly on Tariffs and Europe steps up by reducing reliance on Russian O&G, I think there will be a temporary global glut on paper, but this strategy will keep prices in the $60-80 with an average around the $70 mark.

On this basis ENQ can survive and make some FCF given AB's strategy is on track, what is needed now is a U turn on licences and EPL and I also think that is now firmly on the cards, but it better be more than Hunties head line grabbing tinkering with the mechanism which remains one of the worst PR deceptions I can remember.

Frac, if it is an Olive branch, let us hope that the Government's rancid and parasitic EPL fruit falls off and stops poisoning and stunting the tree growth!!

I sent this to the AGCC having read the article in Dumbly's link:

"Bravo, finally an unequivocal article that spells out the facts, the undisputable numbers and explains exactly what the ridiculous and punitive Government policies are creating in the North Sea O&G industry - a disaster for the UK economy, nation and tax paying people."

Auson, the whole NS O&G industry should get together and threaten legal action of some sort to tip the Government's hand by raising the stakes and associated publicity.

EPL is driving companies into administration and going concerns into loss making entities and being selective in its persecution and singling out one specific industry for punitive taxation. If the Government can privatise profits are we not de facto a communist dictatorship/state and will the Defence Industry be the next target with doubling of defence spending and wars everywhere - surely that is a windfall for them?!

Slightly worried that without news that the ENQ sp will flatline or drift slightly. Not sure why we have to wait for an investor results meeting until the 14th October, however, at least it is in the diary, plus hopefully there will be a further update in two months time. It will be interesting to see if the update (last year 20/11/24) is delayed until after the budget (26/11/25), just in case Rachel is overcome by common sense regarding EPL.

In the meantime, geopolitics seems to be holding the POO against the backdrop of doom Sayers talking down POO and I strongly suspect that Millibrain will have to complete a U-turn on NS licences. The question will be whether the Government decides to apply the manifesto handbrake on the U-turn and address both licences and EPL at the same time - the prospect of a drubbing in the various elections could precipitate such a manoeuvre as long as it does not turn out to be 360 fudge donut like Hunties' EPL Energy Security Investment Mechanism!

The results seem to be a bit of a curate's egg........... The operation of the company apart from the impact Magnus shutdown seems to be excellent as usual and apart from POO, the elephant in the room continues to be the excessive and punitive EPL. I was pleased to see a AB robust comment:

"We remain very clear that we are committed to continued investment in our UK business, targeting material, value-enhancing growth. Our near-term pivot to investment outside of the UK underlines, however, how successive UK governments have made the UK North Sea globally uncompetitive through fiscal policy. The UK remains the only country worldwide levying a windfall tax on energy profits, in an environment where even the Office of Budget Responsibility acknowledges that prices are at, or below, historic norms and therefore no windfall exists. Following a well-run consultation on the future of the UK’s oil and gas fiscal system, we believe that the UK Government now has a tool with which to revitalise this sector; materially increasing investment and tax revenues to Treasury, improving the UK’s energy security in a volatile macro environment, and protecting jobs across the country, which are currently being lost at a rate of 1,000 per month. We implore the government to act now to avoid the accelerated decline of this industry and the resulting death of the UK’s energy transition ambitions."

The second half of the year should be a lot better and our patience will hopefully be rewarded with a decent dividend at the year end, in the meantime the Government better do something about EPL, sentiment is now behind NS O&G and Liebore are running scared of the May elections.

Googled "North Sea News EPL:

North Sea oil news in September 2025 focuses on the Energy Profits Levy (EPL) (windfall tax) impacting investment and the government's efforts to shift its fiscal stance by permitting "tie-backs" for near-field exploration. While some analysts warn the EPL costs the UK Treasury billions in lost revenue and drives away investment, a recent oil discovery by ORLEN in August 2025 and calls for a more pragmatic fiscal regime highlight the ongoing debate surrounding future North Sea investment and energy security.

EPL and Industry Concerns

Tax Increases: The EPL's headline rate for North Sea operators has increased to 78%, with the government announcing intentions to further reduce investment and capital allowances and extend the sunset clause to 2030.

Investment Decline: The high tax rate and regulatory uncertainty have led to a significant drop in North Sea investment, with analysts warning of a £10 billion loss in potential cash flow and a potential doubling of UK import dependency by 2030.

Treasury Losses: Some analysts argue the EPL has passed the point where higher taxes increase revenue, estimating it could cost the UK Exchequer £12 billion in lost revenue.

Government Policy Shifts

Softening Stance: Energy Secretary Ed Miliband is reportedly set to soften the government's position on new North Sea exploration.

"Tie-Backs": The government may approve "tie-backs," allowing new exploration to link up with existing infrastructure like pipelines and fields, a recommendation from Professor John Underhill's independent review.

Future Tax Mechanism: The government launched a consultation on a new oil and gas price mechanism to replace the EPL, which is due to end in 2030, to better target gains from high prices while protecting investment.

Other Developments

Recent Discovery: In August 2025, ORLEN announced a significant oil discovery in the North Sea with estimated resources of up to 134 million barrels of oil equivalent.

Ongoing Debate: There is an ongoing debate between political quarters advocating for increased domestic production to meet future energy needs and those highlighting the maturity and declining output of North Sea reserves.

The Times has reported that Millibrain is about to do a u-turn on tie-backs, if this happens straight away, action on EPL could come sooner with the budget and upcoming elections and a Liebore drubbing being the catalyst.

Something has to break soon, ENQ MCap sinking towards £200m, we are almost at the five year sp low which was a year ago - I still cannot compute this sp given the progress the company has made in reducing debt and hitting targets despite EPL.

Dumbly, great article that states exactly what we have been saying and should be done, however, it falls short of stating EPL should be scrapped.

The poll of readers on should the UK drill NS O&G was 96% in favour and my guess is that most people across the country would agree.

The arguments whether financial or environmental are growing stronger and Starmer and the Government, apart from Milliband, can't ignore what is needed - a pragmatic approach to extracting NS O&G and energy transition.

I noted that the consultation is due to report at the same time as the budget, if true and with the May elections coming up, I am slightly more hopeful that there may be nuggets of hope for NS O&G in the budget, at least changes to the licencing policies, if not EPL, changes to the latter I suspect the Government will drag out to 2026 due to a desperate need for any HMRC revenues.

I noted that the Unions are expected to pile on the pressure for a change in direction on NS O&G during the Labour Conference and even the ardent Greens are realising that NS O&G is integral to a successful transition for many reasons including the availability of finance, skilled workers, supply train and heavy equipment etc. I hope that AB will add his weight with a vigorous statement and even suggestions as to what needs to be done immediately.

Three days now to the results and as I have repeatedly said, I expect to see trading volume and price increase into the results and a spike if there is a decent deal announced. No deal and we'll drift to the budget, quantifiable changes to licencing and EPL, not just window dressing which we have seen before and ENQ will fly back to a more reasonable valuation.

That was a large trade and I assume we are in a closed period now, so can't be a director. In fact, yesterday recorded the second largest number of trades in a day this past year. I personally have bought into these results, now due on this Wednesday and whilst I don't think they will be spectacular, I do think they will be solid and be a good indicator for ENQ's future. What I am hoping for is some other announcement, probably related to Waldorf or Prax and I am also expecting Monday and Tuesday's trading volumes to be higher than average and a slightly more blue week, although without some news we are in danger of drifting and then flatlining again around the 11's.

Can't wait to see the results and operational update.

The second questioner at the Press Conference asked about NS O&G, to Starmer justify stand on NS. Starmer answered, determined to get energy costs down, mix will include NS O&G, pragmatic approach (paraphrased) IN ESSENCE HE COMPLETELY AVOIDED THE QUESTION and then to cap it all, HE ATTEMPTED TO CUT TRUMP OFF FROM ANSWERING!!! Trump interjected - Drill baby drill, a strategy that helped address inflation in US, NS is a great asset, wind turbines were a disaster and expensive joke, loved UK and Scotland and he was sure that under this PM things would change.

I think Starmer had his ear bent by Trump on NS O&G, I think Starmer knows this issue is about/is already starting to bite him, but Milliband and other issues/priorities such as Starmer survival are preventing any "pragmatic" action to change EPL. If things don't change in the budget, perhaps now unlikely, something will give on EPL in 2026 as raw data, statistics costs will tell an immutable story of the NS unless rapid change is implemented.