Member Info for Dumbly

Yes, great find, romaron.

China, aided and abetted by our Western eco-socialists, green-grifters, the green-blob, and subsidy-farmers, have stitched us up like a kipper.

And China, for sure will not any time soon be banning new licences/drilling:

China’s Boldest Oil Hunt Yet

https://oilprice.com/Energy/Crude-Oil/Chinas-Boldest-Oil-Hunt-Yet.html

“Because the biggest energy challenge that human civilization faces—as articulated by “Landman” protagonist Tommy Norris—is whether we would find an alternative before it runs out.”

Romaron, yes, all activities in the UK should be subject to mandatory scope 3 emissions reporting.

Many countries have not yet passed into law scope 3 emissions reporting obligations. Therefore, logically, before any oil and gas can be imported into the UK, the importer should produce evidence of prior scope 3 reporting or do the reporting themselves. In fact, the same should apply to all imports.

Rachel Reeves is trapped by her own rhetoric.

“…the episode also shows up Labour’s incoherent stance on the North Sea, with its manifesto pledge not to block existing projects but to refuse new exploration licences. If re-approving old licences brings energy security and growth, why doesn’t new fields? “

https://www.thetimes.com/article/06d18c26-6d84-4376-89ca-be47a580f4f7?shareToken=923a96dda8c4bf11e0b7ce1149344740

The Times View on Ed Miliband’s oil quandary: Scarlet Pimpernel

Mr Miliband will soon be forced into a very public declaration on the future of the proposed Rosebank oilfield and Jackdaw gasfield in the waters off northern Scotland.

https://www.thetimes.com/article/ee760824-e514-462a-bdcd-5bd20fbcd920?shareToken=bf2684bf03bce01b259e5da0427cd7c1

Lord Ericht by stating: "The question for me is not whether the projects should go ahead, but whether the unlawful decisions should be retaken in a lawful manner." and “Shell, Equinor and Ithaca, knew or ought to have known at the time that the consents were granted that the law was uncertain." has boxed in Miliband. By stating this, the option for the companies to claim compensation from the state should re-consent not be granted has actually been greatly reduced, and probably removed. This in turn has ramped up pressure on Miliband as it reduces his scope to withhold consent and then let the compensation aspect be fought out in the courts. He could still try to go full-zealot and withhold consent but that would require Starmer’s blessing and the repercussions would be enormous. How much humiliation can Miliband take before he does the honorable thing? No doubt he will find a way to spin it and justify staying in his role and continue to fight the good fight.

Krak, I need to see the full document, but my current understanding is the judge has said the consent was unlawful because did not consider scope 3 emissions, so if you want represent with the missing info and let the government decide, but the in the meantime you can continue preparations but don’t extract until/if you obtain re-consent. If the government does not re-consent the state will be open to legal challenge, and growth etc etc will be stunted. The government will give re-consent. Trust me, Donald and Rachel told me.

Content = consent

Hydrogen = hydrocarbons

“ Uplift’s executive director Tessa Khan said: “If Equinor and Ithaca Energy try to push Rosebank through despite this ruling, the Government must reject it. To do otherwise would undermine its ambitious clean growth plans by sending a signal to investors that the UK isn’t serious about transitioning away from expensive oil and gas.”

Push through…? The companies will provide the impact analysis required to provide legal remedy and re-content will be provided.

The UK is indeed not serious about transitioning away from oil and gas at the speed Tessa wants, otherwise the majority of the UK population would shun any product or service requiring hydrocarbons and imports of hydrogen would be banned.

Something similar had to be the decision. It highlights the illogic, indeed ideology-driven idiocy, of needing oil and gas, having “growth” as The priority, but stopping domestic production. It now puts the ball back in Miliband’s court. He has to, and will, agree to providing new consents. Otherwise, the whole Labour edifice comes tumbling down. Plus, in doing this, giving new consent he will accept the argument oil and gas will be needed and local production, as far as possible, is better. B&B are safe in consent terms, and the decision to re-consent R&J could well be a precursor for a U-turn regarding new licences. I want to see how Labour, Miliband, and Tessa & co, spin this one.

(for sure, if the companies involved had not already been given a wink they would stop work on the fields, with all the consequences.

Nigel Farage’s next act: Hammer Labour on energy costs

https://www.politico.eu/article/nigel-farages-next-act-hammer-labour-on-energy-costs/

IR also said by doubling UK production now through a transformative deal, or deals, this would accelerate the utilisation of the tax assets to within three years, delivering an incremental increase in NPV10 value that is broadly comparable to EnQuest's current market cap.

The NPV10 at current conditions, assuming taking 10 years to consume the tax losses, should therefore be around 20% of current MC. That doubling UK production through purchase/s meaning the tax losses could be used up in 3 years makes me think that all tax losses could be used for purchased production, not just 50% as i had understood from Stevo’s comments.

IR have confirmed the company’s recognised tax asset is not $2.5b approximately $1.9b as at 30 June 23. They are looking to incorporate a further $1.2b of tax losses associated with the Bentley entity into the EnQuest Heather Ltd entity but the timeline for that transfer to be executed is into 2026.

Considering this $1.9 billion of recognised losses, long-term oil price of $70-75/bbl, and the baseline production from the existing [UK] portfolio, it would take around a decade to consume this tax assets. To consume this tax asset in a 5-7 year period, as AB said recently in Davos, it is estimated would require a long-term continuation of spot prices of c.$80/bbl which, while possible, is more bullish than the current analyst consensus

Mod, I can’t access the article, but it would not surprise me if Miliband maintains that position but… finds some way to spin it that a third runway at LHR would not break NetZero targets.

I just saw my “schoolboy”calculation error, being that tax at 40% is not applied on a profit amount after EPL has been deducted, but on the same profit amount on which EPL is also applied. Considering this, I calculate that to use $2.5b of tax losses/credits in 6 years would require an average annual profit before EPL and tax of $417k. At an average production of 42,000 boepd, this would mean a pre EPL and tax profit of $27/boe.

These revised projected figures still seem far too high. Is there still something I am still missing?

How to Labour square their policies on “Growth”, Net Zero, including towards the North Sea with their “construction” plans? Building 1.5 million homes by 2030, more runways (hello, Ed), the infrastructure for the dash to the so-called Clean Power by 2030, and much more. Will these constructions be subject to Scope 3 emissions considerations? Starmer has said he will not allow environmental-based concerns to be used to challenge Labour’s construction plans. So, they want to reduce the oil and gas the UK produces but are happy to have policies which will create more emissions, greater environmental degradation by covering the country with more steel and cement, itself causing emissions somewhere inside or outside the territorial borders, have more planes landing in the UK, import more oil and gas. Do they think the UK is covered by some force-field dome keeping out those beastly foreign emissions? You could not make up the irrationality and contradictions. This situation must crack at some point and either there is a “collapse”, as this BS simply cannot be maintained, or polices have to change to be more coherent and in sympathy.

One of the 4 "pivots" to Asia AB just listed was an exploration J-V in Indonesia with some majors there. Presumably this is related to the big gas discovery he referenced in Davos last year as IR confirmed this was in Indonesia. At this point, why can the details of this JV, at least who the JV partner/s is/are, not be disclosed to investors?

AB just said to use the *tax credits "on their own" would take, depending on oil prices, 5-7 years, but that through acquisitions the NPV of these credits could be accelerated. To use the *tax losses on their own in 6 years at an average use /year of $417k would require on average $670m/year profit before EPL and tax. This would be a pre-EPL and tax profit of around $44/boe. I don't see the current figures and projections showing an average $670m/year profit before EPL and tax. Can anyone explain/help me understand how EnQuest at current conditions could use up all their tax credits/losses in around 6 years?

*(for me, the tax advantage until used to offset tax on profits are "tax losses”. After use the "tax losses" create “tax credits” with a value equal to the tax saved, currently 40%. Therefore, the maximum value of the “tax credits” is 40% of the “tax losses” currently recognised of around $2.5b, so $1b, discounted based on a calculation/judgment of the speed and likelihood of being used to get a NPV.)

'Polling also shows that three quarters of Scottish business leaders think that transitioning away from oil and gas is in the public interest and support a ban on new licensing.'

Why, I wonder, do 75% of "Scottish business leaders" support a ban on new licencing? Why do they have the opposite view to the Scottish voting public? Something feels strange here.

TW, I'm with you and AA, and my top 3 deal possibility guesses are:

1. Harbour (offloading UK assets could also usher in a listing switch to the US and a likely valuation boost)

2. Waldorf

3, APAche

Thanks, Stevo, but I was thinking of the other way round, some clever contractual/financial arrangement resulting in EnQuest acquiring some/all of Harbour’s UK production.