RE: Nimrod24 Sep 2024 20:53
Ronwoking – I thought I would try to be a bit more constructive than Kever. Purely in the interests of clarity on a few points you make, before they get copied forward by others and perhaps lead to future misunderstanding:
The 17.5% calculation is based on Revenue (minus allowable transport and handling costs) rather than Profit.
The DCUs (and the Deed) expire end March 2027 (latest) rather than September 2026. The final qualifying date will be end December 2026.
The final payment will be end March 2027, if not reached the full 12.5p before then.
Now correct me if I’m wrong but the alternative ‘potential dividends’ you have quoted appear to be based solely on uplifting the DCU calculation from 17.5% to a 100% equivalent, yes? If so, that’s not realistic as it doesn’t account for any of the other business running costs incurred by Hurricane/Prax Upstream that would be deducted before calculating a dividend from profit. So any equivalent dividends that could have been paid by Hurricane in its previous form would be substantially lower (see the Scheme document for 'contrived' indications).
I understand what you were trying to show by way of that example, but important I think that we all deal with clear facts as some forum users take posts on here for granted and then argue them forward without checking them first. Likewise, happy for my points - based on the Scheme and the Deed - to be fact checked too if I am misguided.
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On the tax credits – they will likely have helped Prax secure the Total deal (and possible future deals) at a price that would be advantageous to them, and DCUs will receive benefit from that deal likely from the Sept 2025 payment onward, if the deal completes in Q1 as indicated. So by default there may be that future benefit accruing on the DCUs, as it was previously unlikely that well 6 alone would achieve the 12.5p maximum before DCU expiry under the current arrangements. That’s not to say what Hurricane might otherwise have been able to achieve with the tax credits, just a comment on the DCUs themselves.
I’m not in any way trying to justify the deal here, just stating my observations for consideration (and challenge as required by those better informed).
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