Member Info for Dumbly

Great “rant”, AIM, and opening statement for a legal challenge.

I agree with the thinking in your first para, but who knows whether the industry is keeping in the back pocket the option of looking at using the ECT to challenge the government. Altho, seems challenges have been more about denying progress when agreements made rather than when taxation has been used to effectively semi-nationalise the industry.

Regarding the Energy Charter Treaty, the real question becomes what does this mean for investments in the UKCS? What government actions could be challenged and according to what conditions could such challenges be upheld or not? Presumably, if the EPL (or other taxation) could be challenged using the ECT, this option would already have emerged, at least as a discussion.

Oxygen, indeed. I guess this 20-year clause was there because that's the sort of timescales associated with such things. Seems "everybody" is exiting. Who knows if the leavers with gang up and object to the sunset clause.

See: https://en.wikipedia.org/wiki/Energy_Charter_Treaty#Calls_and_plans_for_withdrawal

"Several countries and organisations have proposed withdrawing from the ECT. However, the Treaty has a "sunset clause" that allows lawsuits to be filed for 20 years after the departure of a member; Italy left the ECT in 2015, but was successfully sued in 2022."

Profit, apparently, the Treaty has a "sunset clause" that allows lawsuits to be filed for 20 years after the departure of a member. What all this means and... would a UK government respect the terms of the Treaty I know not.

BT, you say what many of us would like to happen but you come across as a ramper.

Per the video here https://juststopoil.org/ they plan in the summer "gatherings at airports" to hit "at the centre of the carbon economy". This is timed to impact the General Election. It could get interesting when people are potentially stopped from flying out for their hard earned holibobs. It could also backfire on the organisers and participants and end up with an opposite outcome to the one they wanted,

Redbuffet, re your second para, that's what Modestus' 0804/5 posts today about the article "Creativity will be critical" were addressing.

Https://app.webinar.net/KQZ4oD8okJ6

Yesterday I listened to the webcast. My impression is as romaron’s. My guess remains M&A is bubbling under, which is not actually a guess as they said such several times. It is a guess that whatever it is very close to being communicated. And that it will be “transformational”, so unlikely just picking up a bit of production here and there. Of all the comments, the once which stuck out the most for me was from JC, being “This is a basin that needs a Champion to pull the threads together, operate efficiently, to manage the transition pathway” (maybe not completely verbatim, but that was the message). This, together with all the stuff about top quartile, having unique characteristics, lowest costs, and with tax credits coming out of their ears, and that uncertainty over changes to the EPL level does not really impact negotiations from either side, indicates something big, something “transformational”, is on the cards. And soon.

Right and nice idea but… how likely the politicians will give away control in this fundamental area?

“To this end, the country should consider creating an independent body, which can truly balance energy security, sustainability, and affordability to deliver the best long-term outcome for the UK and the home nations.”

https://www.energyvoice.com/oilandgas/550336/windfall-tax-comment/

Thanks, romaron. My further comments below. In capitals to make it easier to see my comments.

1. No chance of EPL being tampered with until after the election. MY POINT IS SIMPLY THAT WARNINGS OF THE CONSEQUENCES OF KEEPING THE EPL WILL CONTINUE, AND I AGREE THAT NOTHING WILL CHANGE.

2. We haven’t seen a ‘Labour Manifesto’ and at times the electorate have shorter memories than goldfish. I’M ASSUMING LABOUR WILL CONTINUE WITH THE STATED POLICY TO REMOVE THE ALLOWANCES

3. I think Labour will have an absolute majority but it won’t wipe away problems. AGREED.

4. I think EnQuest are only looking at deals that work with high tax and a hostile government. YES, AND ANOTHER DEAL AS WITH ROCKROSE, FOR THE REASONS EXPLAINED BY STEVO, COULD HAPPEN BEFORE THE ALLOWANCES ARE REMOVED.

5. A fiscal event always possible as common sense and realism returns plus 'events' - Russia could escalate. THIS FISCAL EVENT LATE 24 OR EARLY 25 WOULD PUT INTO LAW THE ANNOUNCED REMOVAL OF THE ALLOWANCES PROBABLY WITH IMMEDIATE EFFECT.

6. Tricky one about Bressay. If they announce it won’t proceed then it won’t because governments don’t pay ransoms (they usually act before via back channels). This is a massive game changer for the company and the UK if it happens. The activists really are a spent force because their threats of global collapse haven’t materialised and renewable prices are unaffordable and going higher. Occam’s razor says it will go ahead because of the chains of parsimony that Labour will creatively invent. I do believe Ed is on borrowed time. IF THE ALLOWANCES ARE REMOVED SEEMS HIGHLY UNLIKELY ENQUEST WOULD PROCEED WITH BRESSAY.

7. No idea who the others are and would need government diktat. I’M THINKING ANY OTHERS WITH FIELD DEVELOPMENT OPPORTUNITIES WOULD ALSO NOT PROCEED. COULD EVEN ROSEBANK DECISION BE REVERSED?

8. Tax credits are ‘sanctified’ and would drive business away from the UK if removed. AGREED. AND BACKDATING ALLOWANCE REMOVAL HAS, AS I UNDERSTAND, BEEN SHEVED.

9. M&A – no idea. We have plenty of wiggle room and possibly more of a before/after election decision. Before means likely to get a Labour blessing; after something to negotiate with as there is a chance Labour are creating a new narrative due to professional industry and economic analysis or more likely due to simple expediency. MORE A GUESS THAN ANYTHING, BUT SOME M&A BEFORE THE AUTUMN IS THAT GUESS.

Thoughts on this possible scenario:

-Continued “warnings” are issued by various parties of the consequences of removing the EPL investment allowances.

-Labour’s manifesto confirms they would remove the investment allowances.

-An election in November results in a Labour government with an absolute majority.

-EnQuest immediately does another deal/s similar to the one with Rockrose.

-A fiscal event is made with changes from start 2025, or thereabouts, and include negative changes or complete removal of the EPL investment allowances.

-EnQuest announce Bressay will not proceed (for heavy oil extraction).

Others make announcements stopping other fields being developed.

I am assuming the tax credits cannot be cancelled (just no way that could be done, all investors would shun the UK), and removal of the investment allowances would not be back-dated (not so sure on this one).

I also expect by November 24 that the size of EnQuest’s tax credits not already earmarked for use will be significantly less than now because there will have been some relevant M&A.

Stevo, I second AIM’s comment, you really know your stuff. Excellent knowledge and analysis. Thanks. EnQuest’s tax credits “pot of gold” has been partially accessed/monitised.

It is encouraging to see such creativity. Also makes one assume further creative use of the tax credits is likely on the cards sooner rather than later (especially considering a likely incoming Labour government).

Stevo, regarding whether EPL can/was be applied to Bressay deal sale, and given it's important to understand about this, is it not best to ask IR?

AIM, what was bad about the timing of the RNS? That the share buy-backs, which were part of the good news, were announced in the same RNS, or something else?

Krack, AIM was referring to the Alliance News article and maybe you're referring to the Energy Voice article?

Good spot, Mod. Certainly confident and bullish from Myerson.

Not a positive headline.

https://www.energyvoice.com/oilandgas/north-sea/550898/north-sea-operator-enquest-posts-post-tax-loss-following-windfall-tax-impact/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20Daily%20Newsletter%20B%202024-03-28&utm_term=Energy%20Voice%20-%20Newsletter%20%28B%20Test%29

Romaron, does King Julian XIII come from that island?

I also recommend all watch "The Movie" - I am not asking anyone to accept it but, as said, I'd welcome the view of "reasonable people". It covers the role of water vapour. Put simply, the position is that water vapour/clouds have a big driving effect on temperature. Cloud amount and density, they say, is driven by "cosmic rays", which in turn are blocked, more or less, based on solar winds. The sun's activity together with cosmic rays are therefore the biggest driver for the earth's temperature rise/fall. I get the high-level theory, but who knows if it is right. On temperature, it also needs to be considered that due to urbanisation temperature measurements which before we taken in rural areas are now in areas surrounded by concrete, which increases the temperature a few degrees. Central London will have one temperature whilst out in the sticks it will be lower. The Movie also addresses the "consensus" issue. Imagine denouncing religion during the Spanish Inquisition! Back to CO2 - the scientific evidence shows we are currently in a "CO2 famine" i.e. we need more CO2. Anyway, best to watch The Movie with an open mind, and then comment. The commentators in the film, according to a few checks I have done, all seem "reasonable" people - no nutjobs. I know Greenpeace don't like the fellow who claims to be a co-founder of that organisation, but also remember Greenpeace are also completely against Nuclear power too.