Member Info for DennisThePennis

Retaining the first year allowance for capital investments is positive and I guess will make some development projects feasible.

For SQZ, being able to utilise the Tailwind tax losses will help to soften the blow of the 38% EPL, boosting FCF for a while and hopefully allowing the dividend to be maintained.

The big question now is what assets they will acquire with their loan facility. Although the UK isn't attractive for most companies, it might make sense for SQZ if they can acquire assets at the right price with transferrable tax losses. Potentially they could take HBR's crown as the UK's largest producer.

At least we now have certainty. Companies can plan safe in the knowledge that taxation isn't go to change again (hopefully).

They're in power due to our flawed FPTP voting system, not because they have the support of the people. Claiming they have a mandate is disingenuous, and they need to be careful they don't push their political ideologies too far.

Their production guidance always seems to assume nothing goes wrong. But something always goes wrong. In this case, it was a gas compressor on Triton.

If there are single points of failure and a risk of unplanned outages, they should factor this into their production forecasts rather than assuming everything operates at 100% reliability.

Better to under-promise and over-deliver than the other way around. We don’t need more bad news.

Although SQZ doesn't have any link to Gryphon (as far as I know), there is a general risk that something similar might impact SQZ at some point.

For all their assets, SQZ relies on infrastructure operated by other companies, including production hubs, pipelines and terminals.

For example, Dana operates the Triton FPSO production hub, and other companies operate the export pipelines from Bruce.

The government has always encouraged use of shared infrastructure, and as more companies wind down their UK North Sea operations there may be a "ripple effect".

This is something else which this government has probably failed to consider.

Oil and gas is a high cost and high risk business. Operating late life assets at minimal cost seems a good strategy until something goes wrong which swallows all your capital. Also, sustaining production requires continual development of fields, which in itself is a costly business. Could they even get licences to drill new wells? Also, there are abandonment and decommissioning costs to consider.

I'm not saying it's not feasible, but all these factors need to be taken into account. With such an aggressive tax regime, it hardly seems worth the effort. As someone else has said, it might be easier to put the money in the bank and earn some interest.

Not enough people take an interest in this stuff.

We take certain things for granted like food, housing, healthcare, defence and energy. I think a rude awakening may be coming before this government has finished.

It’s bound to be a better investment than SQZ.

Legache, I like maths. Probably more than Ed Miliband and his advisors.

I did the sums on solar panels and a battery for my house. Cost including installation would be £9.5K and based on my energy usage payback time would be 26 years. Not a compelling cost case for me.

If people want to install solar, that's absolutely fine, but nationwide rollout is going to take a while unless cost comes down.

Anything's possible with enough money.

Let's assume the UK's annual electricity requirement is around 300TWh, allowing for some demand increase due to electrification of vehicles, home heating, etc.

Let's assume renewable generation capacity isn't available for 10 days worst case due to lack of sufficient wind and/or light.

We would need to be able to store 8.2TWh of electrical power.

Today, the world's largest battery can store 3,000MWh (0.003TWh). We would need 2,733 of these at a rough cost of £857 trillion.

I hear Rachel is going to change her fiscal rules to allow more borrowing.

Until the tax regime is more predictable, investing in the UK is a total gamble. If the EPL is increased to 38% and capital allowances are removed, it will be impossible to make money from new investments. Decline would be rapid.

The future of the industry hinges upon whatever Rachel Reeves announces in her budget next week.

Legache, I'm not opposed to solar, I just think we need to be realistic about what's achievable.

Converting the electricity grid to 100% renewables is the first objective, which might be possible by 2040 if large-scale battery storage is genuinely feasible (I'm dubious about this). The current target of 2030 is clearly absurd.

A much bigger challenge is replacing all the vehicles, appliances and machinery which rely on fossil fuels. In my view, this will take at least 30 years. Just think about all those gas boilers in people's homes and cars on their driveways.

We'll continue to need oil and gas for a very long time to come. Better it's produced domestically, for the many reasons discussed extensively on this forum.

It's OK, Ed Miliband is going to install giant elastic bands which will be wound up to store energy for use at night. He's done the sums and he's only going to need 950 trillion of them.

Remember, the grown ups are in charge.

There's a lot of talk from politicians like Miliband about the "skills transition" but it's going to be a damp squib.

The oil and gas industry requires geologists, geophysicists, petrophysicists, reservoir engineers, well engineers, structural engineers, subsea engineers, production technologists, operations specialists, economists, and myriad other professionals.

Wind and solar requires a tiny subset of these skills.

Oil and gas requires a large offshore workforce to operate and maintain facilities.

Wind and solar requires a tiny fraction of this workforce.

The government needs to come clean and disclose how many jobs will actually be created in the renewables sector. I'd bet it's about 20% of the jobs currently required for oil and gas, with average salaries considerably lower.

Maybe they can ask the other 80% to pedal exercise bikes to generate electricity when the sun's not shining and the wind's not blowing.

Hope you enjoyed your holiday.

It was a bit of a tongue in cheek comment. I first heard the Maldives would be "underwater soon" about 50 years ago. This was one of the more memorable terrifying climate-related predictions.

Apparently the Maldives is going to be underwater soon.

SQZ has done a good job communicating its opposition to Labour’s proposed tax changes. Indeed, it’s a shame other companies haven’t been so vocal.

With the budget just days away, I hope the BoD is preparing a statement to update shareholders on company strategy, depending on what’s announced. They need to be on the front foot with this and include projections on production, cash flow and profit for the next few years, reflecting whatever fiscal arrangements are in place. Hopefully they have already been modelling different scenarios.

Planning for her budget, Reeves will be surrounded by advisors explaining why she can’t implement her bright ideas which went into the Labour manifesto. All will have unpalatable consequences which she failed to anticipate.

The great thing about hammering O&G is that it’s such an easy target, supported by the majority of the public. It aligns with the net zero obsession and it raises more revenue, at least in the short term until the sector ceases to exist. Sadly, as a politician, Reeves will be focusing on surviving her budget and won’t be worrying too much about long term impact on the country.

SharkSaber, I agree that nuclear is the most sensible option for baseload power but 5-10 years is hugely optimistic. Just one plant takes 10-15 years to build, and to meet expected demand growth we'll need roughly 10 new plants equivalent to Hinkley Point C.

In the next 10 years, more nuclear plants are being decommissioned than built. Sadly for Miliband and this ridiculous government, the dots don't connect.

It seems Miliband has just realised he needs some way to store energy for use when the wind doesn't blow. He's proposing to build hydro dams all over Scotland.

Obviously that's not a 5-minute undertaking, even if it's feasible (financially or logistically).

His target of a carbon-free electricity grid by 2030 is pie in the sky and his "plans" are going to start unraveling soon.

At some point, they WILL realise oil and gas is required for another 30-40 years. It's just a matter of time.