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Ditto, Dumbly. Fingers are right on the button today!

Quick question. Why don't interviewers, who are paid to challenge interviewees, hardly ever do this by following up on facile answers given by slimeball halfwits like Reeves, as she lamely bleats "78% is what they charge in Norway" as if to justify her theft from a vital industry successive Govts have all but destroyed.

The Norwegian tax regime (in regard to oil & gas operators) to the UK's is as chalk is to cheese.

As most will know (but evidently not the PPE graduate with 5 or 6 years of semi-relevant experience in the BoE and HBOS - or the lightweight interviewer with a double digit IQ ):

There are massive differences between the UKCS and the NCS when it comes to tax.

1. The Norwegian Govt effectively underwrites all the risk relating to oil & gas price volatility (most importantly on the downside). In simple terms, if any Norwegian company in the sector books a loss in any fiscal year, a 78% tax rebate is immediately paid to that company in cash.

2. On average, Norwegian oil & gas fields are bigger and newer than their equivalents in the UKCS, resulting in opex costs for NCS operators of something like 50% of those of UKCS operators. There is thus around twice the pre-tax profit available to Norwegian oil & gas cos out of which to pay the 78% - or to put it another way, 50% more is retained after tax by NCS operators than UKCS ones.

Whilst companies operating in the NCS may not like the 78% tax rate, the policies have been consistently applied over the years. So companies know where they stand and can plan accordingly.

UKCS upstream producers only made increased profits for around 9 months (oil) and 18 months (gas). The big winners were the downstream outfits (retail energy suppliers, eg Centrica, and the forecourt operators). Had Sunak hit them with a WFT they'd just have increased their prices to make up the shortfall. This would have meant him having to pay out even more in bribes to the masses whose energy bills he'd decided to pay in a desperate scramble for upcoming votes. He chose to bankrupt the upstream sector instead - who would ever object?

Labour only did what Labour always does. Take what's already there, then take as much more as they can. Then give the money to their client base made up of public sector (non) workers, the 9m people who are either too sick or too lazy to go to work. Shortly before the next election watch out for permanent leave to remain in the UK being granted to all the immigrants and the voting age reduced to 16.

Should get them another term in office - maybe more. We just get squeezed more to pay for it all.

dyor

Reeves's failure to understand the first thing about oil & gas is mind-boggling. I know I bang on about the Dunning Kruger effect and how it's evident which ever direction we look in. But an example of someone fitting the definition so perfectly, who is in charge of the nation's finances, is extremely concerning. Just listen to why she says the 78% EPL is justified: "because that's what they charge in Norway". The woman is a simpleton. I won't go into why the Norwegian and the UK's tax regimes are like chalk and cheese, but she's stupid enough only to look at one particular aspect - the tax rate charged - and make the assumption it's safe to compare the two.

She is also in the camp (of very stupid people) who think that if she raises tax rates, more money will flow into the Treasury, pro rata. Anyone sensible knows it doesn't work like that. Less than a year in office and it seems Labour (ie Reeves) is already beginning to find that out, with VAT on private school fees, bringing non-doms into the UK tax net, huge taxes levied on UKCS O&G operators - plus a few more - all failing to raise anything like the taxes she and the utterly useless OBR worked out would flow in. It's all explained concisely enough by the Laffer Curve. Reeves evidently hasn't heard of it.

I've forgotten more about economics than she'll ever learn - and I wasn't even an economist. In the profession I got a fair way up the ladder in, someone who'd been at the job (as a graduate entrant) for 6 or 7 years was beginning to be useful, although too inexperienced to be giving business advice. Partnership in the best firms took 12 years or more to get to - if you made the grade. Reeves's genuine belief that she has the intellect, knowledge, capability and experience to run the nation's finances is ridiculous. I remind readers of my "short-cut" explanation of people afficted by Dunning Kruger effect: "people who are too stupid to understand how stupid they are".

https://x.com/stvnews/status/1920164464541725069?s=46

The link below is o/t, but also concerning. Starmer recently announced the Tottenham clown will be our Foreign Sec through to 2029. God help us.

https://x.com/BurnsideWasTosh/status/1919342617050906756

Would someone let me know when spring arrives, please? 200 or so civil servants who make up the NSTA haven't had anything to do since it was announced Rosebank and Jackdaw had illegally been granted EIA approval however many years ago. In the meantime, Shell, Equinor etc had lobbed a few billion into the fields thinking it was ok. The whole thing was a bit of a b.ugger's muddle - not one the Supreme Court would have anything to do with. The NSTA then said they'd come up with guidance on future EIAs "in the spring". The weather's been too good to expect them to go to work so, given summer is nearly here, one imagines they meant spring next year ?

What a mess - all caused by ineptitude and dishonesty. Who (that is sane) would invest in Britain today?

Thanks for the info, MPO818. I managed to find the video(I think). As you say, a good listen. I could add a few things to what McCormack says but there's no point.

https://www.proactiveinvestors.co.uk/companies/news/1070052/north-sea-oil-and-gas-and-impact-of-the-energy-profits-levy-cavendish-insights-1070052.html

The stubborn pig-ignorance of politicians like Miliband, Starmer, Reeves and about 408 others Labour MPs is beyond measure. They simply don't want to believe what everyone knows will be the result of what Sunak is ultimately responsible for. Labour would never have dared introduce such a draconian tax - all they had planned was a 10% WFT on above average profits - no more (or so they said). Reeves found it easy enough to make it worse (as Labour always does) when they got in.

It was Sunak's vanity and desperation for power that caused his U turn on NS WFT. He'll have known he was targeting the wrong beneficiaries of high O&G prices; it was the downstream industry that made the big money - the forecourt operators and retail energy suppliers. He couldn't hit them with a WFT though, as they would simply have increased their prices to pay for it - and this would have meant him having to bribe the electorate to an even greater extent than he did, with money stolen from the upstream sector that has always relied on the good years to counter the bad. The upstream sector was only just starting to recover from 2 years of ultra low prices caused by Covid, then WHAM. It has never recovered.

Politicians (and the lefty mandarins in the civil service) still don't get it. They don't understand the destruction caused by uncertainty. What happened to: "in the spring" for scope 3/EIA guidance?

And re tax rates post 2030 (EPL was supposed to end in 2025) they've had months to come up with something to replace it, but can't stand the thought of not being able to continue to milk an industry that's always been a cash cow for Gov't, except when they went too far and NS tax revenue dried up completely for more than 2 years in 2014/15.

Gov't will have had 8 years of falsely claimed EPL (2023 to 2030) by the time the EPL is lifted. Getting the industry to agree a future EPL is a con. There have already been four extensions of a dishonestly applied supposedly temporary WFT. As for escaping it? Above average prices only lasted 9 months (oil) and 15 months (gas). Forget the dishonest "escape mechanism" based on fiddled so-called "20 year average prices" invented by one of Sunakhunt's crooked minions who failed to factor in inflation, made no allowance for the Covid years or 2014-2016 when the Arabs turned on the taps to kill the US frackers and then made the EPL impossible to escape by dreaming up a means of escape there was no hope of applying.

The above was all missed by McCormack.

I continue to work on the premise fundamentals win in the end. Or perhaps that what makes sense will come to pass.

Hang in there...........

dyor

........."We could see an SP of up to £4.00".........

..........unusual for you to be so pessimistic, chessman :-) JOG's share price reached £4 before it had any oil to speak of, after the Verbier side track discovery in 2017 - JOG held an 18% interest in an est 25-160mboe that turned into 25mboe when the appraisal drill failed.

It reached £4 again when JOG was awarded P.2498 Blocks 20/05a, 21/01a (Buchan & J2). Some might wish to remind themselves of what JOG owned then, vs what it owns now.

https://www.lse.co.uk/rns/JOG/offshore-licensing-round-awards-option-agreement-x83b41cvrfppv2v.html

Many events outside JOG's control have not gone its way over the years, not least the way UK Gov'ts of both colours has "stripped the industry bare" since 2022, when it should not only have been expressing its thanks to enterprising, industrious and innovative companies like JOG, but also easing their burdens to the extent possible, with light-touch regulaton and fair taxes. The dishonesty, sheer incompetence and utter stupidity of (in this case Conservative) politicans was exemplified in the so-called "impact statement" set out in the HMRC policy statement of 21 Nov 2022, in which it was announced the EPL would be increased from 25% to 35%. This what was stated, as if, by stating it, it made it valid:

"Impact on individuals, households and families

There are not expected to be impacts on individuals as this measure only affects businesses".

Really? What about the tens of thousands of job losses the dishonestly contructed punitive and inescapable EPL would cause in the industry? Or the impact on people with UK oil & gas companies' shares in their pension pots? Or people like JOG's founder-directors and other key employees, who had worked shrewdly and tirelessly for years to achieve their ambitions, their entire futures dependent on a level playing field, experiencing set-back after set-back, yet never giving up or losing belief. Or, of most relevance here, the impact of the EPL on people like us - JOG's long term holders who have kept their faith throughout.

To Sunak, none of the above counted in his desperation to remain in power. He was too stupid to realise the catastrophic effect it would have on the entire nation. Or maybe he didn't care? We've all seen what happened.

To tie it all up neatly, the following was stated at the end of HMRC's announcement:

"Victoria Atkins MP, Financial Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure".

Victoria ("look at me everyone, I'm SO pretty") Atkins - a solicitor of no particular repute - appointed Financial Secretary to the Treasury? They could have asked me, except I'd have pointed out it was all b.ollox

My DCF/NPV numbers justify a number significantly higher than £4. Not being critical. Just my thoughts.

dyor

"Top Labour advisers are putting pressure on Sir Keir Starmer to ditch the party's ban on new North Sea oil and gas drilling.

A handful of senior officials are understood to be quietly urging the PM to consider watering down or scrapping the manifesto pledge altogether to see off the growing threat from Reform UK.

Government sources last night played down the idea, saying the ban was a 'very long-held manifesto position which we won an election on'.

A spokesman also said ministers 'stand by' the manifesto pledge and doubled down on the Government's target to turn Britain into 'a clean energy superpower'.

However, Reform is looking to weaponise the issue and become the new party for 'working people' in Labour's traditional heartlands.

Reform leader Nigel Farage used a rally in Durham this week ahead of next month's local elections to warn that his insurgent party was 'parking our tanks on the Red Wall lawn' and that it wants to 'reindustrialise' Britain by ditching Net Zero targets and breathing new life into traditional industries such as oil and gas.

This comes amid expectations that Secretary for Net Zero Ed Miliband will again be humiliated by the Prime Minister, who is set to approve the Scottish Rosebank and Jackdaw oil and gas fields developments.

Both were given the green light by the previous Tory government but were challenged in the courts by environmental campaigners.

They were ruled unlawful by the Court of Session in Edinburgh on the grounds that the Government did not properly consider the environmental impacts.

However, ministers will carry out a new assessment and are expected to approve the developments as early as this summer, despite Mr Miliband describing the Rosebank oil project as 'climate vandalism'.

Yesterday, The Times writer Patrick Maguire used his column to claim there were 'tentative conversations' about whether to ditch the ban on issuing new drilling licences in the North Sea.

While one Government source dismissed the report as 'unsolicited gossip', others said they believed it to be accurate but that discussions were not at an advanced stage and was instead 'just chatter'.

In its manifesto, Labour pledged to double onshore wind, triple solar power and quadruple offshore wind by 2030 and bring the target for removing fossil fuels from UK electricity production forward to 2030.

Union leader for GMB Gary Smith had warned that Labour's Net Zero targets are 'bonkers', will 'decimate' working communities and push up bills for the country's poorest.

He also dismissed Government claims that shifting to renewables will create 650,000 jobs by the end of the decade, saying roles would mostly be created offshore in countries such as China, where Labour's renewables infrastructure is largely built".

tbc

I'm not "anti-DELT", Thunder. I was definitely anti-Swindells but have no axe to grind about anyone else. I don't blame Nunn for what happened - it wasn't his field of expertise and I believe just went along with Swindells.

DELT and JOG are just at different stages of their development, which has a material effect on DELT's fundamental value. I can't see DELT managing to retain any more than about 10% after farming out a sufficient % to make investment worthwhile for a farminee. To apply a NPV10 of between $83m and $114m to whatever DELT's interest in Selene ends up being seems totally unrealistic to me. JOG's exposure to risk was at its maximum in the period leading up to the farmout to NEO. It took a long time - despite constant upbeat talk about the huge level of interest being shown by serious industry players - to sign up a partner, which involved giving away half the action. This was followed by a further farm out of 30%, when 25% was the number we had been led to believe was the target. But the key thing was JOG had a free carry on its 25% of anticipated development costs of Buchan of close to £1bn.

Swindells opted to raise £15m (his and Nunn's packages were increased substantially and soft options were awarded to the two of them to make sure their interests weren't diluted. Shell was gifted 50% but there was no free carry.

JOG's ability to progress is outside its direct control, but we all know what the risks are. There's no doubt the oil is there. It's all the nonsense about man-made global warming and the Conservatives introduction of the ridiculously punitive EPL, supported by lying and cheating in that particular den of thieves, that's scuppered progress to first (second actally) oil. Labour only did what Labour does - take whatever's already there and then take more. The tale of the scorpion and the frog comes to mind.

It's the timescales and risks associated with the two companies that are so different. I'll close the subject now. I'm simply giving my opinion. I don't say I'm right.

Good luck withwhatever you choose to invest in - particularly JOG!

dyor

Thunder - are you seriously making comparisons between DELT and JOG? DELT has a non-operated 25% interest in Selene, which is estimated to contain 174Mbcf (c. 30Mboe -7.5Mboe DELT) of 2C resources in the Southern NS. Shell is 75% operator.

DELT has no cash to speak of, so it will need to raise 25% of whatever it costs to develop the field. The most likely way it will do this is via a farm out of whatever % is necessary to make the deal worthwhile for a company with the funds needed. First gas is presently anticipated in 2029. Maybe DELT might end up owning something like a fully carried 10% of the licence? DELT believes its 25% of Selene has a NPV of USD$83M net to Deltic at a gas price of 80 ppt and USD$114M at 100 ppt, the current tax regime. I belive it is in cloud cuckoo land.

JOG owns a fully carried 20% of UKCS licences P2170 (Verbier) and P2498 (Buchan & J2). These were originally estimated to contain 170Mboe, but following due diligence by the farminee this was moderated to "more than 100Mboe". I'm working on 120Mboe. Whilst the (mostly) oil is categorised as 'contingent', Buchan was still producing after 27 years when the rig failed on H&S grounds in 2017. It was certified in the last CPR issued still to contain 50Mboe. So afaic 25mboe is a fair estimate of JOG's 20% interest in the GBA licences.

I have calculated a NPV10 for JOG's 25% of the GBA licences, adopting conservative assumptions (OPEX $25pb: Brent $70; tax as it is until 2030 then 40% thereafter), of more than $200m. In getting to this I have attributed no value to Verbier Deep, Wengen or Cortina, nor factored in cash (current and anticipated) all of which are prospects only at this stage.

A big difference between JOG and DELT imv is the calibre of its management. Ron Lansdell and Andrew Benitz, JOG's founder directors were right out of the top drawer. RL stepped down when he was 70, leaving it to AB and the former ITH team - also from the top draw - to complete the farmout to NEO and SQZ). I have noted each time the register is updated that RL has retained his significant holding.

DELT had Swindells and Nunn (now CEO) after Algie Cluff went. Swindells diluted s/hs to oblivion, then farmed out assets forgetting to get any carries. He deservedly went.

I could go on, but there's no point. Investing isn't (or shouldn't be) about looking at a company's share price, sticking up a finger to see which way the wind is blowing then taking the plunge. JOG is a serious company run by serious people and with a share register that includes some very experienced gamblers.......sorry, investors :-)

DELT might be a winner in the end, but the risks don't to me justify an investment. I did own a decent number before Algy Cluff rode off. I rode off too as soon as I found out he'd ridden. I bought more JOG and SQZ with the money.

dyor

I was actually responding to sasa43's 15 April post (14.34hrs) when I posted what I did. Sasa - whose intelligent and balanced posts are always a pleasure to read - had commented: " As for fracking here, that's far from practicable in the UK really, given our heavily populated areas, unlike the US where there are so many vast open spaces available not to be troubled by the occasional earthquake tremors arising from it".

I was aware earth tremors weren't the only issues the green brigade will land on so, as I had some time on my hands, I googled something like "problems with fracking " and posted the summary written by Google's AI robots. You appear to have missed the quotation marks I was careful to include in my post. Those who have read the posts I've made on the SQZ blog (I've been invested since about 2015) will know I usually post in a balanced way, generally try to accommodate views views different to my own and I do my utmost not to let myself and others down by appearing rude or ignorant. I worked in business at a senior level (background in accounting), so I can sometimes add perspective to things others find difficult. Conversely, I greatly value the perspective some others, particularly those involved in the industry (take a bow, Mommur and others) are able to bring to situations I find difficult to understand fully because I'm not an engineer (for instance).

I'm ambivalent about fracking. Like sasa, it is difficult to see it getting off the ground in the UK but wdik? It doesn't really affect me as I'll be dead by the time any serious debate starts. I've just finished reading a book entitled: "Blow Out" by Rachel Maddow (a bit heavy in places but well worth a read if you're interested in the murky world of big oil & gas). Maddow gave a number of examples of "Big Oil" (which is well represented in the US Senate) "sweeping under the carpet" some pretty horrifying incidents involving fracking, with money being used to ensure these incidents didn't reach a wide audience. I couldn't recall the exact detail of all the incidents (and I wouldn't have wanted to post them anyway) so posted what was written on Google by the AI bot. What I posted were not my personal views or opinions.

There's little doubt in my mind that all the issues raised by whatever AI represents will be wheeled out by the usual types should application be made at some point in the future for fracking projects to proceed. Forewarned is forearmed. It's always wise to read the warnings .

As a "greenwashed zealot", guess I'd better get back under my bridge now.

dyor

............"where did you see Murray admitted flaws in release mechanism?"..........

...............the admissions are all over the place in the "consultation" document linked below. It is difficult to see how Murray (the inept and dishonest spokesman for the even more inept and dishonest Labour Govt, which replaced the even more dishonest if not so inept SunakHunt's mob) could justify carrying on with the existing EPL after he's said:

" The government is committed to introducing a new mechanism that:

• Delivers a fair return on the UK’s resources at times of unusually high prices,

• Is predictable and provides certainty,

• Minimises distortions on investment decisions,

• Minimises the administrative burden for taxpayers and HMRC,

• Recognises the difference between oil and gas markets.

The new mechanism will allow the UK to benefit from immediate

additional revenues during periods of unusually high prices, while also

ensuring that the industry has the clarity it needs regarding the future

fiscal landscape. By offering a stable and predictable framework, the

government aims to strike a balance that supports both the Exchequer

interest and the industry's capacity to innovate, plan and invest in the

future.

Chapter 3 sets out in more detail what the above objectives

mean in practice. "

https://assets.publishing.service.gov.uk/media/67c8426e75d7505462fc65a0/Oil_and_Gas_Price_Mechanism_Consultation_Final_PDF__1_.pdf

Every man and his dog knows that what SunakHunt came up with that supposedly meant EPL would only be charged during a period of extraordinarily high was worthless, because the chance of both oil and gas prices moving in alignment for a continuous period of 6 months post 2022 was zilch. Just to make doubly sure UKCS operators couldn't escape the dishonest EPL, the rhyming Hunt excluded inflation from the benchmark 20 year average historical oil & gas prices and he also ignored the effect of extraordinarily low prices between 2014 and 2017 and the Covid years from 2019 to 2021. Prices were back to normal (given there are always price fluctations caused by all sorts of events in free markets) by the time Hunt came up with his c.rap. Were the EPL to continue until 2030, it would mean UKCS upstream operators paying extortionate rates of tax for 8 years, when they only benefitted from extraordinarily high prices for a maximum of 18 months in the case of gas and about half this in the case of oil.

Cheating aholes.

Labour needs to regain lost trust from an industry that's reluctant to invest while there's so much uncertainty and returns are so low. Continuing to bleed the industry dry for Labour's entire period in office is not the way to achieve this. Even Reeves now seems to recognise this. She, Murray et al won't be shouting about it though, because they're scared of red Ed's nutters.

We continue to wait, in the hope sanity will prevail

dyor

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