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"Warren Buffett’s most famous quote on patience is: "The stock market is a device for transferring money from the impatient to the patient". He consistently advocates that successful investing requires long-term discipline, often saying, "No matter how great the talent or effort, some things just take time".............

dyor

Not sure of the validity of today's offerings. As I read the situation, nothing happens without NEO's approval. It owns 50% of the GBA licences and is operator.

Given NEO and SQZ are providing JOG with a free carry on all development spend up to first oil, it is difficult to understand why JOG continues to pay a full board of directors, plus a number of other senior people. What are they all doing? NEO is operator, not JOG.

It is time JOG told its owners (ie us) exactly how it reads the present situation, what it is aiming to achieve, by when and with what. We have remained patient whilst directors have been paid close to £1m a year for their achievements (which the market values at £30m, against the £40m+ shareholders have contibuted to date in cash), including at least 2 directors (in all probability 3) being paid cash bonuses of £250k each, payable immediately for achieving the farm outs, when JOG is nowhere near FDP/FID, which would at least provide certainty long term shareholders are entitled to expect after waiting more than 10 years for some kind of reward - even if only in the form of shareholder value exceeding what they've contributed themselves.

It is unproductive to carry on in negative mode, but I do think it's fair to record that other UKCS small caps have done a lot more than JOG has to protect their shareholders from excessive risk. JOG has taken a route that has resulted in it having only one asset to exploit (the GBA licences). And in pursuing the only real option open to it, JOG has ceded control over that asset in return for a free carry on its (somewhat disappointing 20% - it was aiming for 25%) share in the overall project.

My personal preference would be to put up a "for sale" notice and see what happens. SQZ and NEO have resources that enable them to wait as long as ncessary to get optimum value out of the GBA licences. By 2029 JOG will be nearly out of cash at the present level of spend. It is not imv a foregone conclusion that Labour will get kicked out in 2029. A Labour/LibDem (even Green) coalition is a possibility. If it came to pass, even more difficult conditions in the North Sea would quickly follow.

What a mess. All caused by the fashionable beliefs of billions of very stupid people ("the climate crisis will end the world as we know it"). What "climate crisis"? Do they mean the weather has been changing a lot in temperate climes? Dunning Kruger is alive and kicking. Billions of people are too stupid to understand how stupid they are. But there are more of them than there are of us and they're represented by politicians to whom lying and cheating is a worthy way to make their living.

form your own views

.......hope I'm wrong, but Labour don't do tax reduction. And we know dimwitted simpleton Rachel (despite her Oxbridge degree - utterly useless in this context - she hasn't got a clue about real life; she doesn't get the Laffer Curve for a start). No-one in the industry back in 2022 would have objected to HMIT charging a windfall tax rate of 100% of profits made as a result of Brent Crude trading at above (say) $75pb and/or NPB at 90ppt (with UKCS operators being categorised as "oil" or "gas" based on UKCS revenues generated).

The escape mechanism dishonestly introduced by the rhyming then chancellor (Hunt), was designed to make sure the dishonest tax would be payable for the most of the Conservatives' delusional next term in office. They were of course kicked out and we know the rest. The EPL was then increased and extended on a grand scale.

There was never any justification anyway, for charging the killer rate. Profits on made on UKCS operators' profits at ordinary BC and NBP prices (say, up to $75pb and 90ppt) should have been taxed at 40% as these weren't windfall. The rates dreamed up by dishonest and incompetent politicians wwere designed to provide money to buy votes. It backfired bigtime.

From the ST y'day I've pasted the first few paragraphs...............

"British industry is now in terminal decline, killed by expensive energy.

Britain looks set to become not just the first country to industrialise, but the first to completely de-industrialise............ Elizabeth II started her long reign, and Dwight Eisenhower was elected President of the United States in 1952. It seems like a very long time ago, and almost everything has changed out of all recognition since then. Still, one thing is the same. British car production has now fallen all the way back to levels last seen that year. Likewise, cement production is back to 1950s levels as well. Industry is collapsing all around us – and that is rapidly turning into a national emergency............

..... The list goes on and on. With every week that passes, another couple of factories close their doors. The UK is experiencing a wave of deindustrialisation that is unprecedented in any developed country".

Utter incompetence.

imo

dyor

According to the latest figures from the Society for Motor Manufacturers and Traders, the number of cars made in the UK fell by another 35pc last month, hitting a 73-year low. The cyber attack that shut the lines at Jaguar Land Rover triggered the latest fall, but it has been steadily declining for years now. Likewise, last month the Mineral Products Association reported that cement production had fallen to 1950s levels. The tyre manufacturer Pirelli last week said it was “temporarily” closing two tyre factories in Staffordshire and Cumbria. Funnily enough, it turns out that when you don’t make any cars you don’t need many tyres either. At the end of September, Wedgewood suspended production at its factory for 90 days.

I may be way off the mark as I have no background in the technicals of O&G (mine is on the financial/commercial aspects), but there's an FPSO vessel ("Western Isles" or "WI") laid up at Scapa Flow, waiting for a home to go to. Could this be adapted to replace Triton? An agreement for NEO Energy (current owner of 23% of the WI) to acquire the other 77% owned by Dana Petroleum was signed by the parties in Mar '23: https://www.lse.co.uk/rns/JOG/fpso-acquisition-6o2r28fvm4wj4hm.html. The WI was originally built for the Harris & Barra fields, about 160km east of the Shetlands. Production at Harris & Barra started in 2017 but ceased in March 2024.

The terms were that NEO agreed to buy Dana's 77% interest in the vessel but no financials were diclosed. No doubt there was a consderable discount to the $2m the WI was said to have cost in 2017. NEO intended to use the WI on the Buchan Horst development (NEO 50%; Serica 30%; JOG 20% - fully carried). Whilst the WI was said to need a modest amount of work before use on the Buchan project, this was not considered disproportionate. At least until Reeves and Miliband showed up. As a result of Labour's destructive tax and other policies, the delayed deal ran into the buffers at the end of Feb 2025.

https://www.lse.co.uk/rns/JOG/fpso-update-zje2agtkmx2r9v7.html

There was loads written about the situation in the trade press. Neither NEO nor Serica have said a lot about it, however. The assumption (in JOG's case) seems to be that Labour will soon take its size 12s off the UKCS O&G Industry's windpipe and give it a chance to breathe. As soon as it does (I think JPG assumes) the agreement will be resurrected. I wish. Labour doesn't do tax reductions, so I doubt very much any change will be made to the EPL which is as dishonest a tax as it is possible to conceieve. We can blame Sunak & Hunt for this, as it was they who dreamed up a tax that's not only dishonest but is impossible to escape from - Brent and NBP will never BOTH trade at below the false levels set for the same 6 moth period. All that will come out of the so called "consultations" is an extra permanenet windfall tax that will at least (from 2030 onwards) only tax genuine windfall profits, not the entirety of every UKCS operator's profits at a rate of 78% and in most cases even more than this, because both interest and decommissioning costs are disallowed and brought forward losses are restricted to 40%.

Extract from March 7 RNS: "Andrew Benitz, CEO of Jersey Oil & Gas, commented:

"The route to unlocking the Buchan development continues to depend on achieving satisfactory conclusions in respect of the on-going fiscal and regulatory consultations. The fiscal consultation was kicked off yesterday and encouragingly, while the details are yet to be fleshed out, it was apparent that the government has heard many of the concerns of the industry."

They may have heard the concerns, but they neither understand nor will do much about them

dyor

Contd........

My latest attempt at a NPV10 for JOG came up with just shy of £5 a share. I don’t say this is right because much depends on the assumptions used and events/conditions in the future. I doubt very much a majority of the directors would want to sell for this, however. Think of losing all that salary and those tasty perks. I guess their average options exercise price is about £2? I have no idea why JOG needs a full board and a few employees on top to administer a 20% WI in the GBA licences formerly owned by this one-trick pony, when the pony is now owned by someone else. I have asked the question but not had a convincing answer. People will remember the temporary salary sacrifice (50%?) made by JOG’s board last year. But what were the soft (82p) options awards of a few hundred thousand shares more for the directors in March all about? Even the non-execs joined in with the handouts. Looks like compensation for the salary sacrifice to me, as nothing special happened – they just seem to have taken advantage of a low SP and set the exercise price low when they could. The dilutive effect of the options already granted is c.12.5%, although there would be some offset for the cost of exercising the options.

As for the £500k bonus shared by two directors for competing the farm outs, why were any bonuses at all paid when what was achieved was at the very bottom of the 20-25% target retention of the licences. They managed to keep the bare minimum. Even if they could be justified, the bonuses should only have become payable on a positive FID.

The biggest risk of all is Miliband. Labour may be pretending they’ve seen the light on excessive taxes, but you can bet your life on them having UKCS O&G cos firmly in their sights to bleed for cash. Don’t believe a word they say. I’ll be ecstatic to be proved wrong. We won’t know about tax rates until the Autumn Statement.

All the above is a lot longer than I intended, but there was a lot to address – I could have written a lot more but thank God that’s it.

Goodbye and good luck to all.

dyor

Contd..........

I have known (and acted for) plenty of wealthy people over the years. I admire people who have the vision, capability and guts needed to create significant wealth, but there’s a big difference between those who have earned it and those who have inherited it. Although you and others may label me as “an accountant”, my path to reasonable financial comfort involved considerable personal risk, huge personal effort and I guess the inherent ability to achieve what I did in what was a difficult part of the UK to set up a new UK office (when I was 30 - low GDP vs the national avge, not that I recognised it at the time). Less than 10 years later the office numbered 70 and I was offered the senior post in an office of 200 people further east. I decided to remain a dog in the office I’d set up, rather than potentially end up as a lamp-post in London. I won’t go on – none of it matters now. My brain still works ok even if the rest of me is a wreck. Overall, I’ve done alright. I have no regrets. Certainly not in quitting this blog as I am now doing. I should have done it ages ago but have enjoyed engaging with a few enlightened types.

JOG is a risky proposition – we all know that. But to my mind shareholders’ and directors’ interests no longer line up. One of JOG’s most recently appointed directors, when asked why he hadn’t bought any JOG shares using his own money, apparently answered: “it’s the wrong time in my life”. It’s the wrong time in my life too, but I’ve bought 1.3% of this Company with my own money and my wife also has a holding in one of her SIPPs. She was furious when she found out and stopped my pocket money for a fortnight as punishment. I’m in the money on my holding, as I bought a lot of my shares in JOG’s early days, based on a gut feel about the competence and integrity of JOG’s two founder directors, only one of whom still remains. I believe the other one went into pantomime (possibly in Africa?).

I made a lot more on my Serica investment and now of course wish I’d put as much into that company as I did into JOG. I’m not talking just about money.

JOG should imv offer itself to Serica Energy or NEO/Repsol (in that order, although it is - again imv - uncertain NEO/HitechVision has the funds to do so, let alone find the £650m infrastructure costs needed to get Buchan to production).

Hitecvision med resultatknekk – E24

TBC

jim333 - i’ve been away for a day or so and am therefore a bit slow responding to yours of 25th june 11.30hrs. i’m puzzled. why do i need to “tone down" my view that there’s a chance of labour being re-elected in 2029?

here’s something to consider:

“there is strong evidence that the most economically deprived minority voters are the most likely to choose labour. among voters of pakistani, bangladeshi, caribbean, and african descent who earn less than £25,000, there is a 93% likelihood that they will support labour. these ethnic minorities are substantially more likely – by 34 percentage points – than low-income white voters to have left-wing economic preferences. the association between white voters’ socioeconomic status and vote choice is much weaker. low-income white voters only have a likelihood of 42% of supporting labour”.

https://ukandeu.ac.uk/the-myth-and-reality-of-ethnic-minority-support-for-labour/

because of your reference to your wife’s ethnicity – and that of one of jog’s directors, which was news to me – i can only imagine you are labelling me a ******. is it because i painted certain ethnic minorities in an unfavourable light? by inference at least i also painted certain categories of whites in the same light - eg a majority of public sector employees in the uk is bound to be white. ditto a majority of children aged 16 and 17, who could conceivably be given the vote before 2029. and many white people will vote labour anyway, because they always do.

i spent my entire career with one of the so-called “big 4” accounting firms. the one i was with operates in 150 countries across the globe and employs more than 370,000 people of all shapes, sizes, colours and creeds, working to common standards in whichever country or office they happen to be in. i started up from scratch and ran one of the smaller uk offices, which employed a number of people of non-white ethnicity. it was my choice to employ them. i welcomed the different perspective they offered. never, ever, did i either see, let alone participate in, any kind of behaviour that was not strictly merit-based. i would have been out on my ear pdq had i ever done so.

i am no ****** – and it’s pretty low to imply i am. i don’t need your advice thanks. please keep it to yourself.

you can take over as “purveyor of sense” on the blog, i won’t subscribe to a board when “wokery” rears its pitiful and ugly head. but you and the 6 sycophants who recommended your idiotic post will have to up your game a bit, because you haven’t so far posted much that’s useful about jog, the o&g industry, politics or anything else that might be relevant. you have never told us how you came by your wealth for instance. it’s impossible, therefore, to know whether your opinions have any merit. “hope” is not a valid investment tool.

tbc

(Lord) Matt Ridley - from about 30 mins in:

https://www.youtube.com/watch?v=LFPj8tNVoLQ&t=1809s

Unless the people making irrational decisions about this industry in the UK are forced to recognise the lies, falsification of data and brainwashing that's been going on for 30 years or more, which have caused a majority of the population to believe it's an undisputable FACT that CO2 is a danger to human life, they (ie Miliband et al) will ignore the undoubted logic that runs through the independent study Greener linked in his last post. In the linked video above, MattRidley explains it succinctly. A virtue is made by the masses of blaming fossil fuels for the entire increase in the level of a trace "greenhouse" gas, the level of which is affected by many different natural phenomena, as well as fossil fuel emissions.

Instead of lamely acknowledging that irrationally imposed "climate targets" imposed (in particular) on UKCS upstream producers must be met, it is high time OEUK and/or someone powerful in the O&G industry was honest to itself and calls time on all the nonsense, fields a few real scientists to engage with the morons who are bankrupting Britain (as if it isn't racing downhill out of control anyway, thanks to Labour's economically catastrophic growth-killing policies) then watch as people like Miliband make complete fools of themselves by demonstrating they know the square root of f*** all about science, climate, weather, economics...........anything except how to get to where they want, no matter the lies and cheating along the way, or who suffers. They're driven by their communist ideals, which is leading to the destruction of our nation.

It seems probable to me that the EPL (even after having definitively been shown to be unfair applied as a result of the dishonest "escape mechanism" that makes it impossible to escape from) will continue to be charged until Labour gets kicked out in 2029. Thereafter, normality (if paying nearly double the rate of tax charged on any other sector represently normality) will return (ie tax at 40%). Windfall taxes will apply to a lesser extent from 2030 onwards, in the event the UK electorate (nearly half of them either black, arab , working in the publce sector or age 16 or above by that stage) votes Labour back in in 2029. But the tax will still be manifestly unfair because, funnily enough, the "price shocks" that will trigger the tax will only apply one way. Labour wants the cream but won't pay anything towards feeding the cows when no cream is being produced.

"Vermin" doesn't do justice these people.

Somewhat off topic, a few might be interested in the views of David Starkey in a recent i/v with Peter McCormack. Starkey is an incredibly clever individual. A true Conservative - as I used to regard myself, alas no more.........ever.

https://www.youtube.com/watch?v=jLjD1wcf6zQ&t=1950s

dyor

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