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And Labour's first budget would not be before mid September.

“The UK Labour party recently released its election manifesto, including additional detail on its plans for UK oil and gas fiscal terms. In our interpretation, these plans would represent a limited, though still significant, deterioration in fiscal terms, and, ON CONFIDENCE FROM THE INDUSTRY that these would be unlikely to change again, we believe incentives to invest in new projects remain.“

This implies there has been some sort of nod and a wink from Labour to the industry. Clearly, before the election it would not be in Labour’s vote harvesting interests to confirm this or reduce the ambiguity associated with their fiscal plans for the UKCS.

If the content of the Zeus note proves to be correct (with the interpretation of the words, the “rumour” and the associated taxation calculations), when would Labour provide the detail? Wait until their first fiscal event, earliest late September, or sooner to get the hoped for investment-decision balls rolling? I assume the latter. And, how would Labour provide the certainty that the fiscal regime would not deteriorate further during their reign? Pass something into law to cover this?

Stumpy, sorry to say, you got it right with your 13/6 1010 post.

Https://www.artberman.com/blog/ieas-staggering-oil-glut-is-staggeringly-unlikely/

“The IEA has become increasingly vocal in its advocacy for renewable energy in recent years, a stance I support as part of its mission to raise environmental awareness. However, the IEA’s primary role is to provide comprehensive data, statistics, and analysis on global energy markets to inform decision-making and policy formulation.

IEA’s Oil 2024 report, in my view, lacks objectivity and borders on being propaganda for the energy transition. It is a fundamentally dishonest document that strays from the agency’s core responsibility of presenting unbiased information, and I’m calling that out.”

Pslamb, EnQuest pays on profits first the Energy Profits Levy (EPL) at 35%, then tax at 30% plus a Supplementary tax at 10%, so for a total Levy plus tax of 75%. But… EnQuest has 2.5b or so of tax losses from previous years. These losses cannot be used to offset (not pay) the Levy, but they can be used to offset the other 40% of taxes. So, until all the tax losses are consumed, the only Levy/tax to be paid is the EPL at 35%. At the current conditions it will take many (5-10?) years to consume (use up) all the tax losses, so for the foreseeable future EnQuest pays 35% Levy/tax. Labour said they will increase the EPL to 38% and keep it in place until the end of the next Parliament.

Why would EnQuest not buy existing production, ideally with little or no tax losses of its own but which could, presumably, be used to monetise faster EnQuest’s tax losses? Such production should have just become considerably cheaper.

B&B for oil now sounds highly unlikely.

Labour is just so out of tune with what is going to happen energy-wise, but nothing we can do about this (except not vote for them).

When clicking on the link and the message "To Continue reading your article with a WSJ subscription....." pops up, click on the X at top right of the pop-up and the article should open - well, it does for me!

Worth a read.

"After nearly a decade, it’s timely to ask how that energy transition is progressing and how it might fare in the future. A useful framework for that assessment is the “issue attention cycle” described in 1972 by Brookings Institution economist Anthony Downs. The five phases of that cycle mark the rise, peak, and decline in public salience of major environmental (and other) problems. It’s spooky to see how closely the energy transition has so far followed Downs’s description."

https://www.wsj.com/articles/the-climate-crisis-fades-out-5944bd44?st=2l84khcdn7ysjjc&reflink=desktopwebshare_permalink&utm_medium=email&utm_source=CampaignMonitor_Editorial&utm_campaign=LNCH%20%2020240612%20%20House%20Ads%20%20SM+CID_526175bf1af1d2cf8351802ca98a18d3

(If the rest of the article is behind a paywall, it's not for me, I can post it)

Using the "recommends" as a proxy for opinions and applying the concept of the Wisdom of Crowds it would appear my attempt to find anything even vaguely promising in Red Ed's "managing existing licences" statement is considered somewhat... delusional 😂

O, I am more optimistic. Miliband is not all powerful. Reeves and the unions will have a more moderate and pragmatic view. My thinking is maybe the bigger the Labour majority the better, as this way Starmer is less constrained by minority factions within Labour. We have to see, first the manifesto, then the election outcome, then what the reality of being in power brings.

Mod, behind my “but…” there were many various and conflicting thoughts, including those you expressed. I do wonder, tho, why EM bothered added the “managing existing licences” bit - he could have left it out. For this reason, and thinking about Unite/GMB’s etc comments and position, it sounds vaguely conciliatory from EM, but… 😂

A good week to all.

I would like to know what “managing existing licences” means. Sounds vaguely promising, but…

EM in response to Lord Browne’s comments last week:

“The only way to boost our energy security, strengthen our economy, protect our climate and ensure long-term, good jobs here in Britain is by managing existing licences while sprinting to develop the clean energy industries of the future,” Mr Miliband said.

The focus needs to be less on new licences and more on ensuring the already awarded licences are, as far as economically possible, actually progressed to drilling and production. And the “economically possible” bit depends first and foremost on the fiscal regime’s conditions and stability. Developing these existing licences would keep the resources in place and thereby keep options open to reverse, should needs must, any decision previously taken to end new licences. Such a focus on developing the existing licences by putting in place a suitable fiscal regime would, as far as I understand, fit ideally EnQuest’s situation.

You’re spot on there, romaron, Sunak really comes across as a visitor.

*my father lost all his teeth during WW2. In Alexandria. He…caught a gum disease and either antibiotics unavailable or did not work. He had all his teeth taken out in one sitting. My mum said he left with teeth and hair and returned bald and toothless 😂

He also… was on a ship which went down off Syracusa during the Battle of Sicily, and took part in the Battle of the North Atlantic.

This is relevant to our interests but well off-topic about EnQuest specifically so, if needed, just ignore,

See: https://www.artberman.com/blog/its-too-late-for-renewables/

This article states what I think will eventually become the accepted view (although, I can’t see any politicians accepting this view any time soon, and probably unfair to put the burden just on the political class).

The growth and "development" genie is out of the bottle. We are just too "successful" and dominant a species. We are already far too many and will be many more up to... 2,100, and way beyond the numbers needed for the continuity of the species. I don’t see solutions in the article, and that’s OK as the aim was to highlight the problem, the real issue.

Personally, I think we will tinker round the edges and try to fool ourselves we are finding solutions (a lot of irreversible damage from “overshoot” has already been done) until… at some tipping-point the population-limiting mechanisms limiting the growth of any organism will kick-in.

Any other more optimistic scenarios?

In the meantime, let’s be kind to each other, accepting most of us are in the “very fortunate” category, and try to live the life we want.

Thanks, Putup.

Sounds complicated.

Reflecting further, and leaving aside all the absurd arguments made or implied by McFadden, they are saying based on clawing back the profits which they say have been made in recent years they are proposing to increase the WFT by 3% and plug the so-called loopholes. The majority of the recent past profits he is referring to are outside of the UKCS, so untouchable by HMRC. They won’t/can’t backdate the changes they propose to make. Therefore, their proposed changes are going to mainly stop future investment which will mean… well, you know the rest. If this decision is designed to raise revenue it will only do so for a short while as very soon the potential profits to tax will drop drastically. Their policy, therefore, is one to try to catch the oil “giants” to pay more tax going forward to compensate for their recent Worldwide profits made during a period when there was a windfall tax in place. It is a policy dressed up to compensate for past non-existent UK-based windfall profits, on which a windfall tax has already been applied, which in reality is a Green ideology policy to kill investment in the North Sea. And the short-lived tax revenue boost will be to pay for something which will not deliver what is needed (even if all the wind power available could be connected to the grid, renewables would still not provide the energy security needed). There is a gaping chasm in their view of how the energy transition will play out. Looks like either Ed has fooled them all, or they have all become Green evangelists for votes, or they just don’t understand what the unintended consequences will be. What a dog’s breakfast of a policy. For sure, AB and his industry colleagues and the unions and others will be helping them understand.

@theoryman, I have not made detailed calculations, just the volume of buybacks seem large. I don't have the volume of shares traded info. I accept my "calculations" are lacking, and I am not trying to make any point, just wanted to understand if my information re share buyback constraint is correct. So, it seems it is, and therefore the buybacks could not have breached these constraints.

I am informed there are constraints on share buybacks as per below. GKP's buybacks seem to breach these constraints. Is my information wrong or am I missing something? TIA.

There are two constraining factors contained within the Buyback and stabilisation regulations. The first is that it is not permissible to pay more than 105% of the average price over the past five trading days. So if the price has averaged 20p it is not permissible to pay more than 21p. The second is that it is not permissible to purchase more than 25% of the average volume traded over the past 20 trading days. So if the volume has averaged 1,000,000 shares it is impermissible to buy more than 250,000 on any given day. The idea behind these regulations to prevent what is perceived as market manipulation.

To add, my assumption is that a "proper windfall tax", "filling the loopholes" by removing the investment allowances, would result in a de facto ban on the development into production of most new licences, and probably most new drilling, as it just would not be economically attractive to do so.