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I should have said I'm still expecting a positive outcome. If negotiations had come to an end JOG would have had to notify the market via RNS - and that hasn't happened.

It was always going to be a difficult deal to put to bed - there are so many moving parts and the intervention of Sunak and Hunt in NS proceedings can hardly have helped - even allowing for the investment reliefs we all know about . But it is still ilogical to imagine that what JOG has to offer is anything other than a perfect opportunity for a NS producer (maybe more than one) that's paying tax at 75%, to permanently avoid that punitive liability entirely, plus reduce the cost of infrastructure spend by c.15% via the additional relief on reinvestment.

Why would JOG's premium oil not be of major interest to a 75% tax-paying NS producer .

I'd still prefer an outright sale - much cleaner and way less risk - although I very much doubt the well-paid directors will.

jmofwiw
dyor

James - it does you no credit to resort to the use of personal insults. Everyone's feeling the pressure, brought about by the CEO leading us to believe there was a good chance a deal would be struck before the year end, but if not, then certainly in Q1. Whilst Q1 doesn't end for another 30 days, the impression most of us will have gained was that if the positive outcome spoken of didn't happen before the year end, it would surely only be delayed until early in the new year (say, halfway through January).

Now here we are in March and there's been silence ever since 29/11. It's called management of expectations and JAB's overconfidence (or whatever it was that caused him to say what he did, when he did) has badly spooked holders and knocked the share price back so far that it will take an exceptionally good deal even to get the SP back to where it was last October. 0/10 as far as I'm concerned.

It's probably time someone had a serious look at what's going on in JOG and why it needs a board and senior management team so packed with highly paid individuals moving forward (some incentivised by generous options amounting in total to more than the usual 10% of share cap in aggregate).

If no deal is reached by the end of Q1, one would have to ask if one is going to be achieved at all. They've been looking for partners for 3 years+. I won't say any more at this stage in the hope there's a decent outcome in the next 2 weeks. Thereafter, things could move quickly.

dyor

'sittin' / 'waitin' / 'hopin' .....................a new investment strategy for me. Supersedes my normal: s.hit or bust..............

Did anyone see the cretin Starmer (PMQ) making up lies about Britain's filthy, disgusting oil & gas companies making obscene profits and Sunak responding by saying he's taxing their windfall profits at 75% (no he isn't - he's taxing all their profits at this obscene rate - that's proper use of obscene). Starmer wants the loopholes closed because (I quote) "none of them has paid a penny in tax at the new rate imposed by Sunak". The word: "liar" comes to mind, or maybe he's just thick?

There's no hope for Britain with intellectual pygmies like the two Ss to choose from. Britain needs to follow the example set by Zelensky in the Ukraine, where the electorate was so fed up with the existing political forces that they elected him, as leader of a new party ("Servants of the People") with 73% of the vote.

If Reform were to combine with UKIP and the ERG Conservatives, plus other sitting Conservative MPs with views that are clearly different to Labour's, might there be merit in running on a maifesto based on restoration of family values and fairness for everyone capable of and willing to work to support themselves and their country. I haven't really given it much thought, but there might be merit in giving the people of Scotland (or maybe the electorate in the rest of the UK) a second referendum on independence.

What would the identified group have to lose? The vast majority won't be elected next year anyway. What's needed is strong leadership. Although he has many failings, there is one candidate I can think of who would take on the daunting challenges the UK faces that will simply get pushed along the road by whoever is elected next year. If it's Labour, many wealth producers will seek somewhere else to create that wealth - this is never factored into their thinking. Tax of 78% on profits, with no relief is proposed for Capex, is as far left as it's possible to go. After 5 or 6 years, what's collected in tax revenues from NS O&G cos would amount to nothing and Britain would be even more dependent on other countries for its energy - inc banana republics, where net zero is of more relevance to fishing.

Are you up for the new job, Norm? Our country needs your visionary skills :-)

I appreciated your balanced and intelligent response to my last post, btw. There would be no purpose to these discussion forums if there wasn't a divergence of views. Experience has taught me always to follow the money - and there seems a distinct possibility to me its future resting place in SQZ's case is not intended by the people in the trojan horse to be existing shareholders' bank accounts. I sincerely hope I'll be proved wrong in the fullness of time. We should get an early pointer with the upcoming declaration of a dividend the directors wouldn't have too much difficulty doubling or more.

all imo
dyor

ffs.....................No need to c.ock your leg on this post etc

"did you say one sugar or two, Mr Flegg, sir?"
https://www.tailwind.co.uk/leadership-team

........and not a single post.

Well done Mitch & Tony - you've killed the enthusiam of dozens of supportive PIs in a single move. It was up to you to convince this group (inter alia) that the TWE deal was a winner - but you have so far failed in spades to do so.

Seems to me there might be things going on behind the scenes (eg BP's rainmaker joining Mercuria) that could have a significant impact on eventual outcome. This causes me to be even more concerned that, with 28.2% held by Mercuria & "the founders", Serica era of independence is well and truly over . We might well have been told MF will be CEO . but for how long I wonder? I doubt there's much he could do about it if it was decided at some point in the not too distant future that Messrs Edwards and Tohme would make a better CEO & CFO team. They don't strike me as being the types to play second fiddle to people they probably regard as their inferiors.

I accept the deal is done and look forward to many synergies being unlocked in the combined entity. I just have a feeling in my bones that cash generation was the big attractor in this case and Mercuria won't want to share the dividends with a big shareholder base like Serica's for any longer than it has to.

The term "swimming with sharks" comes to mind.

No need to **** your leg on this post, Norm - we know you have vision the rest of us can only dream of, so I admit I'm wrong :-)

dyor

https://www.google.co.uk/search?q=down+down+down&rlz=1C2CHBF_en-GBGB985GB1009&newwindow=1&sxsrf=AJOqlzXM_YGPKQymMd5If2375k9u_AGvcA%3A1677604258785&source=hp&ei=ojX-Y6WFLordgAagsquICA&iflsig=AK50M_UAAAAAY_5DsmYdC688uHGQoAgbJawPMPCrtvSZ&gs_ssp=eJzj4tFP1zcsNM1KMzVKNzVg9OJLyS_PU4ATAIfqCXc&oq=down+down&gs_lcp=Cgdnd3Mtd2l6EAEYADILCC4Q1AIQsQMQgAQyCAguEIAEENQCMgUIABCABDIICC4Q1AIQgAQyBQguEIAEMgUIABCABDIFCC4QgAQyBQgAEIAEMggILhDUAhCABDIFCAAQgAQ6CwgAEIAEELEDEIMBOg4ILhCABBCxAxDHARDRAzoICAAQgAQQsQM6EQguEIAEELEDEIMBEMcBENEDOgsILhCABBDHARDRAzoICAAQsQMQgwE6DgguEIMBENQCELEDEIAEOgcIABCABBAKOhEILhCABBCxAxCDARDHARCvAVAAWOIaYIc2aABwAHgBgAGRBogBghuSAQ0yLjEuMC4yLjEuMi4xmAEAoAEB&sclient=gws-wiz#fpstate=ive&vld=cid:90e5609c,vid:yShNjJCksHg

Mommur - I've thought for a while that JOG might be a good fit for SQZ (and have said as much on the blog). But I dont see SQZ as operator. JOG has referred a few times to a farm in partner or partners. A bigger player would most likely be operator so that the eventual split would be something like 50:25:25. Thi is pure speculation.

Any farm out deal would call for (one or both of) the parties to provide a substantial carry on the capex to get to first oil - and enough cash up-front to cover JOG's outgoings until revenues start flowing. Seems unlikely to me JOG will be able to get a full carry, so it's to be hoped RBL funding (post FDP and FID) will be available to JOG to enable it to meet its share of the capex needed to get to production.

As I say - it's all just speculation. What emerges (assuming something does) is almost certain to be different.

I'm guessing that JOG will already know if whatever they've got on the boil is likely to be finalised before 31 March. If the answer is it's unlikely to be, then they owe the market a RNS. Otherwise, I guess we just wait - on the premise that if there'd been any change to what the market was told on 29 November, they'd have updated it by now.

dyor - wtfdik?

Einbert - in light of your post I've made a request for an announcement tomorrow.

No harm in asking............

220p soon.............

Ithaca more likely............ wdik? It seems to be banging out profits that could end up being taxed at 75%. Haven't looked in any detail at its existing reinvestment plans/possibilities.
https://investors.ithacaenergy.com/

There are any number of possibilities. I just wish JOG would get something positive nailed down before we learn (for instance) of further destruction planned by Sunakhunt.

dyor

...........strange world you inhabit, Robsroom..............

matthew.weightman@hmrc.gov.uk or nicola.garrod@hmrc.gov.uk

https://www.gov.uk/government/publications/changes-to-the-energy-oil-and-gas-profits-levy/energy-oil-and-gas-profits-levy#:~:text=The%20Energy%20(Oil%20and%20Gas)%20Profits%20Levy%20was%20announced%20on,which%20is%20charged%20at%2010%25.

"oil and gas companies are benefiting from extraordinary profits".............they aren't any more. They might again in the future - who can tell? No-one in the industry would object to paying the higher rates on the profits resulting from excessively high commodity prices, so why not set a level (based on "normal prices over the last - say - 10 years) above which a properly constructed WFT would apply? No need to answer that one - the masses don't understand and want their bills paid by Government. Tell them it's coming out of a WFT on mobile phones (carbon intensive, plus the manufactuers have beneffitted from everyone working for home or not at all - Apple made $100bn last year) and you'd have riots.
"European and UK wholesale gas prices reached record highs this year and are expected to remain significantly elevated for the foreseeable future.".................err.............nope
"Oil and gas producers in the UK are making extraordinary profits and this is expected to continue"............indications are it won't
"These changes to the Energy Profits Levy are not expected to have a significant macroeconomic impact on the level of business investment.".............pinch yourselves on this one!! I'd suggest they look back and carefully consider the impact Brown's 60%, followed by Osborne's 62% tax heist on the UK O&G industry had on tax receipts from the NS by the Treasury. After drying up almost entirely for 3 years from about 2015, things were just starting to reecover, then along comes Mr Bouncy Big Ears and you know the rest.
"There are not expected to be impacts on individuals as this measure only affects businesses"............what about us? And the effect on people reliant on income from portfolios that include O&G cos (most?) and the price performance of the companies in the portfolios?
What about Britain's energy security, at a time when it needs to be at its most robust?

I could go on. It was a fait accompli from the outset. Nothing about the measures is either economically justifiable or fair.

We should all bombard the indiduals identified towards the end, with indigation based on common sense. How I hate political pygmies of the kind behind the 'sociopopular' direction measures like those discussed here are taking us. I will never again vote Conservative and I know a number of others who feel the same. I am close to joining the Reform Party, but am waiting to see if Trice has enough gumption to persuade a given number of Cons ERG group MPs and UKIP to throw their hat in the ring and see if a credible new political force might emerge. I suspect what will make it impossible is the reluctance of sitting Cons MPs to risk potentially losing their seats. Imv they're going to anyway. There's no coming back for the Cons this time.

They might do worse than look at what happened in Ukraine and ask Zelensky for advice!!''

FO or TO news this week or next, anyone?

dyor

Feast you eyes on this pile of c.rap from the useless and incompetent OBR:
"https://www.gov.uk/government/publications/changes-to-the-energy-oil-and-gas-profits-levy/energy-oil-and-gas-profits-levy#:~:text=The%20Energy%20(Oil%20and%20Gas)%20Profits%20Levy%20was%20announced%20on,which%20is%20charged%20at%2010%25."

The unfairness of it is startling - even by political standards. As is the fact it is already clear the OBR's assumptions are fundamentally flawed (as usual). (K)hunt has aready admitted the tax revenue flowing in to the Treasury so far is only half of what he expected it to be, no doubt after naively believing the nonsense put in front of him by the Whitehall wizards in the OBR, presumably working from home.

Consider the following:
" This measure increases the rate of the levy to 35% and extends the time that the levy applies to 31 March 2028. This measure also reduces the investment allowance from 80% to 29%. However, the investment allowance will remain at 80% for investment expenditure on upstream decarbonisation. This change in relation to the treatment of upstream decarbonisation investment expenditure will be legislated for in due course.
The government also confirms that it will no longer consider phasing out the levy before the end date".
That sounds fair. Even if oil & gas prices fall by 70% (as they did in 2020)???
So, no matter what the price of oil & gas, profits (to the extent there are any) will be taxed at 75%.
"The government introduced the Energy (Oil and Gas) Profits Levy in May 2022 to respond to exceptionally high prices that mean oil and gas companies are benefiting from extraordinary profits.
European and UK wholesale gas prices reached record highs this year and are expected to remain significantly elevated for the foreseeable future. This is driven by global circumstances, including resurgent demand for energy post COVID-19 and the invasion of Ukraine by Russia.
Oil and gas producers in the UK are making extraordinary profits and this is expected to continue. In response, the government is raising the rate of the levy from 25% to 35%, bringing the headline tax rate for the sector to 75%, and extending the duration of the levy. This ensures oil and gas companies that will benefit from the prolonged period of increased prices continue to pay their fair share of tax".

Brent Crude is significantly lower today than it was this time last year (when Russia invaded Ukraine). So is natural gas. There's no reason to suppose UK O&G cos profits this year will be anything like they were as a result in the price spikes to $120pb and 850pt
https://tradingeconomics.com/commodity/brent-crude-oil
https://www.theice.com/products/910/UK-NBP-Natural-Gas-Futures/data?marketId=5351152&span=2

Behaviour of the kind exhibited by Sunakhunt in their desperation to gain popularity would be unusual in a banana republic, typically in Africa. At least dictotors don't chop off the hand that feeds them.
A few more quotes f

There are quite a few trades showing up on the Aquis Exchange:
https://www.aquis.eu/aquis-stock-exchange/for-investors/trades?securityidaqse=JOG.GB

"If they are waiting for mid-March as per DU's note, then there is little they can say at this stage".........

.........I didn't say they were waiting for mid-March (Budget Day), Surety. I said if I wa signing a deal (or deals) of this size and longevity, for the sake of a few weeks I'd be inclined to wait until it was clear Sunakhunt wasn't going to destroy any more of the NS O&G industry than it/they already have done.

(K)Hunt has recently said he won't be increasing the 75% headline tax rate. But he hasn't said he won't be withdrawing the reinvestment concessions. I wouldn't trust these economically-illiterate clowns any further than I could throw them - which isn't that far because I'm a physical wreck.

An announcement could come at any time. If commercial negotiations had ceased, JOG would have had to announce the fact via RNS. They haven't done so. Maybe someone in the NSTA has whispered to the parties to the deal/s that (K) Hunt won't be doing any more damage in his upcoming Budget. Who knows - they're all in the public sector club?

I doubt AB and the others will let this go to the wire. I'm going to stick my nexk out (again) and vote for an early resolution to the uncertainty. The darkest hour is just before dawn............

Chins up - there could be a lot to look forward to..............

dyor

:-)

As I say - I hope you're right.

Next step? MF's package increases to £1.5m pa?

dyor

NS - the elephant in the room is whether Mercuria decides 18 months+ after the deal is signed that it would rather like to have everything for itself and tables a bid at a price shareholders like us can't refuse but only because there will be no viable alternative unless we want to end up as totally insignificant minorities in a company whose shares aren't traded on any recognised exchange. Mercuria will in practical terms be able to block any counter bid/s by virtue of owning 28.2% of the stock.

There was a commonly used way to avoid this possibility (the inclusion of a "poison pill" clause in the S&P agreement) which I pointed out to ACW. He chose not to address it in his response to my letter, basically just saying he was a significant holder so why would he put his money at risk if the deal wasn't good for existing holders.

Seems possible to me the market will use 278p as a cap for the foreseeable and I guess this isn't likely to change a great deal with the threat of being taken out at market value (plus a derisory mark up) 18 months plus down the road hanging over proceedings.

Just my thoughts based partly on gut feel and the rest on experience. I'll be happy to be proved wrong.

dyor

We already know you see everything, NS. We ordinary mortals can only look on in admiration................