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Romaron, I've not heard nothing new about when the decision about the challenges to Rosebank and Jackdaw is expected. Must be soon tho. This decision is likely to set the tone for the way forward. The hope is the decision will include something along the lines that it is primarily consumption not production which drives emissions, and therefore whether Jackdaw or Rosebank go ahead will not have a significant impact on emissions caused by the UK population's direct or indirect consumption of hydrocarbons (depending on the gas amount from the fields, their entering into production could even reduce the UK's emissions). A decision including something like this could help change the narrative and further highlight the economic and emissions-related idiocy of not developing these fields. It could also give the government a sort of way out to change tack and modify their position on licencing. As well understood, a complementary fiscal policy change would also be needed.

Aim, Krak, I am with you over taking legal action against the EPL, but we have already been round the houses with this and seems nothing to do. The EPL started as a short-term profits windfall levy to support cost-of-living and when the windfall conditions fell away it morphed to a long-term levy to support the energy transition. The ESIM, linking oil and gas and not considering inflation in its calculations is another joke. In reality the EPL is expropriation/theft. A government can pretty much do what they want with taxation/levies. Unless there is discrimination, for example targeting one company, not much, if anything, can be done. I still think a case could be made but it would likely just cause noise and… costs and waste of resources and antagonism.

Something else to principally thank the charlatan Johnson for as done to assist his political survival and to keep in Carrie’s good books (and maybe her “bed” 😊). With support from his then lieutenant, Sunak, and goaded on from the cheap seats by Starmer and co.

The damage and effects are far from limited to the sector. Such unjustified knee-jerk anti-business actions feed into the general “business confidence” perception. Anyone thinking of long-cycle investments in the UK will have noted the EPL and the sneaky and easy way it was introduced. Conversely, putting in place a corrective, progressive and long-term fiscal policy for the sector would also increase general business confidence.

“Not to be outdone, the United Kingdom has doubled down on its Energy Profits Levy (EPL), a windfall tax on oil and gas profits, extending it to 2030 and raising the rate. The move has already claimed a major casualty: U.S. oil firm Apache announced plans to exit the North Sea entirely by 2029, citing the tax’s impact on economic viability. Apache has also halted new drilling in the Forties Field, a significant blow to local production.

The government defends the EPL as a tool to fund the transition to green energy, aiming to position the U.K. as a “clean energy superpower.” But with producers pulling out and production shrinking, one has to wonder if this is progress—or a step backward.

If the U.K. were genuinely committed to reducing oil consumption, that would be a different conversation. The reality, however, is that every barrel of lost domestic production simply gets replaced by a barrel of imported oil (Figure 4). How does this policy square with its supposed goal of using less oil or of improving Britain’s current account balance? Lost revenue and higher costs don’t seem like a winning strategy for energy or economics.“

https://www.artberman.com/blog/the-energy-march-of-folly/

Where’s Wally Blah-Blah Beaker? Keeping his head down to avoid engaging with Trump or something else is brewing? Dissent regarding NZ must be bubbling. Chinks in the party-line are appearing. Oops, he's popped up today on X to... highlight the Copernicus report. He wrote "...we have the answers to tackle this existential threat...". Translated; it’s as good as all over and without my intervention you will die. Does he really believe he has some god-like power to stop nature?

There is more talk, sensibly, about the need to take steps to adapt to changing climate. This shift towards adapting to change, rather than stopping it, feels significant and represent a move to realism. (Even if it could be equally said the adaptation is required because of people living in places and in greater numbers than ever before seen.)

Whether CO2 does or does not have the effect Miliband and co claim, and whether the UK manages to reach net zero carbon emissions from within its own borders, the outcome for climate in the UK will be the same. This volume and mix of energy consumption in the rest of the world due to their population and improved living standards will see to this.

Come on Starmer, less of the VSG (Virtue-Signalling Globalist). The people you lead and you're responsible for are within the UK. Show leadership towards them. Support the interests of the British, "Working people" et al. Drop Net Zero. It will help with the country's accounts too.

In the press today:

“The chancellor has been clear that she… is now focused on rooting out waste in public spending through the Spending Review and growing the economy.”

The chancellor would "leave no stone unturned in her determination to deliver economic growth and fight for working people".

To root out waste in public spending, how about looking looking at the spending chasing Net Zero targets which, anyway, if achieved won’t change diddly squat. And for real productivity increasing growth, how about encouraging investment to extract more oil and gas from the North Sea? It would help energy and national security too.

Https://youtu.be/EbcVF4qrTXU?si=kZ70IMvkxauJbRve

January 6, 2025 5:39 AM

Jefferies analyst Mark Wilson upgraded EnQuest Plc. (ENQ:LN) (OTC: ENQUF) from Hold to Buy with a price target of GBP0.15 .

And, Stove, Kraken, not just a change in fiscal policy is needed, but also certainty of stability of any improved fiscal conditions. Some mechanism to guarantee the fiscal policy could not get worse for… 20 years, or the lifetime of named fields or something similar. Otherwise, the clevers in the government of the day, once they calculate there is no point for them to encourage and incentivise companies to continue investing, will assume they have the companies over a barrel (sorry 😂) and seek to again mug them by expropriating through taxation as much revenue as possible. Exactly what has happened now by stopping new licenses and upping and extending the EPL. Once fooled… Without some guarantee like this most companies will not take the risk to invest. Is such a mechanism possible? Something like the decom guarantees?

EnQuest in the UK, as you say Stevo, has the window between now and any such fiscal change announcement to continue extraction from existing fields and buy producing assets to use up its tax losses. This, in parallel with decommissioning and energy transition activities thru Veri. And, if a suitable fiscal policy is not forthcoming… then B&B does not go beyond the planned gas cap extraction.

See on another BB. All worth watching, but the “hard science” part starts from 14:25.

The level of CO2 has a negligible impact on temperature. This according to Princeton University’s Emeritus Cyrus Fogg Brackett Professor of Physics, William Happer. According to him the direct warming from CO2 is about 0.71c. Furthermore, a 100% increase in CO2, so from the current c.400ppm to 800ppm, only has a 1% impact on increasing temperature.

He is not saying we have not had an impact on climate, but that “CO2 almost does not matter for climate, its’s a nothing, a phoney emergency”. The emphasis and drive to Net Zero, in other words, is... BS.

Anyway, see this from September 2023 and draw your own conclusions: https://youtu.be/v2nhssPW77I?si=Hzp6qxHaVbKFQlge

Thanks for the explanation, Stevo.

I am correct to understand these losses can only be used against profit resulting from operations at Bentley/Bressay?

Also, until there is a plan to develop B/B and a profit can be reasonably forecast from the fields, is it correct that these tax losses are not considered "recognised" i.e. given any value on the B/S? At this point therefore, these losses and the tax credits which could result, effectively have... no value?

Stevo. I agree with you on the value of WP’s tax losses and that there are several potential buyers of WP. Serica has tax losses too. IMV EnQuest is the prime candidate. Almost certain the whole company (not sure which of the multiple legal entities this would be) will be purchased by same buyer.

Buying WP would not be the transformational deal but could be a step on the way to this.

I hear talk of a potential EnQuest/Serica merger or similar. Feels unlikely but not unrealistic.







Happy New Year!

Aim, in January 24 Aaditya Chintalapati, Waldorf‘s CEO, at the Pareto Securities E&P Independents Conference, was reported as saying Waldorf had “substantial tax losses”, of around $900 million.

At the same time he said that it made more sense for Waldorf to be a buyer than a seller: “Incoming interest is difficult because we find that the most effective way to crystallise the full tax value is for us to be acquirers, buying production that we can get 100% of value for. Somebody who buys you will not get full value for it, there’s always some haircut you would have to take. I don’t think we’re in that position yet,” As the year progressed his thinking necessarily changed. It looks like the CEO was presenting WP’s position as far stronger than it was. This type of behaviour seems to continue. Then there are the financial and legal troubles of the main shareholder. In the meantime, the Administrators appointed in June will be happy to continue racking up juicy fees. It must be a super-strained environment. The bondholders will not allow this state of limbo to continue for much longer.

Agreed, Aim. Up to $150-200m is the deal range.

Whoever buys WP’s assets, or even if WP unexpectedly find some other finance and survive, will want to drill soonest at Kraken. It would not surprise me if EnQuest made some side deal with Dolphin to have an option to keep the drilling resource on standby to possibly drill earlier than the communicated 2026. My money is still on EnQuest buying WP. And possibly paying less in 2025 than they would have paid in 2024.

(I understood WP’s tax losses to be $0.9bn not $1.5bn)

Or maybe the other way round, that once it was known agreement could not be reached on the 2025 drilling programme maybe lined to a purchase agreement, then the WP bondholders gave consent to the intercompany loans to give some further breathing space. Whatever, it looks like WP are grasping at survival strawers and will need to make a deal with someone very soon.

On 27/6/24 Waldorf Production announced refinancing and stated “Whilst the Refinancing put the main operating companies of the Group on a stable financial footing for a 12 month period, its terms included tight controls on the Group’s ability to manage its cash on an intragroup basis”.

On 11/11/24 they requested consent from the relevant groups of bondholders for the up to USD 15 million intra-group loan.

0n 26/11/24 they announced the consent had been given.

On 20/11/24 EnQuest announced “At Kraken, the joint venture partners were unable to agree a 2025 asset drilling programme”. EnQuest would have known by then consent had been received from the WP bondholders

My guess is WP thought they had leverage to get EnQuest to proceed with the 2025 drilling programme at Kraken. If this had proceeded, it would have increased the value of WP’s share of Kraken. If this was WP’s plan it did not work.

All this, plus the fact a deal for all of WP’s assets is required for WP’s NS assets, makes me think WP have probably played their last card and are very fast running out of options and therefore that a deal must be very close.

Michael Shanks has a degree in history and politics and worked for a charity before retraining as a teacher in his late 20s. He is 36 now. He was employed as a modern studies teacher at Park Mains High School. He has also been involved in community and charity initiatives for disabled people and ran a scout group for disabled children.

He sounds a decent fellow but with a non-political career such as his does he really have the experience for such an important and crucial position? I bet he speaks and debates well though. There must be a lot of Imposter Syndrome going on in the Houses of Parliament.

And, related:

“Labour energy minister Michael Shanks has said the Department for Energy Security and Net Zero “do not hold estimates of required volumes” for [LNG] imports between 2025 and 2030.“

https://www.energyvoice.com/renewables-energy-transition/564966/scottish-conservatives-warn-of-domestic-energy-trap/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20Daily%20Newsletter%202024-12-31&utm_term=Energy%20Voice%20-%20Newsletter

Swazers, the SP has done its work, now you do yours!

(just joking 😂 )

A couple of other things about Waldorf.

The NSTA has said it would only approve a sale if a deal was found for the whole group, meaning no field can be left orphaned. Presumably they would accept deals involving multiple buyers.

At January 2024 Waldorf had around $900k in tax losses. This should also incentivise a sale to a single buyer. For EnQuest, acquiring more tax losses on this scale would not help to use up and thereby extract real value from their own losses.

A reasonable conclusion is that there will not be many keen buyers and the most obvious one, EnQuest, will negotiate hard. And, in the meantime, the administrators and associated advisers monthly fees are likely to be averaging £100k or more per month. How much longer can this continue?

Ecotricity/Dale Vince in 24 donated over £1.5m to Labour whilst benefiting from I don’t know how much in wind-related subsidies from the the Labour government. How is funneling tax payers money like this to a political party allowed?