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Interesting article comparing the UK’s and Norway’s approach to their hydrocarbons industry. From… 2015. Maybe the UK has a last chance now to get better returns in the sunset phase of extraction. However, as discussed ad infinitum it will require an acceptable and stable fiscal regime. Certainly not a 75% tax rate.

https://resourcegovernance.org/articles/did-uk-miss-out-ps400-billion-worth-oil-revenue#:~:text=%5B1%5D%20The%20U.K.%20and%20Norway,billion%20boe%20(figure%201).

3df, I agree with romaron, your comment, repeated below, is a good one.

“Does seem a bit odd that UK is judged on production whilst Norway is only judged on usage.”.

Yes, romaron, Norway has played very well the cards it was dealt. Hydrocarbons and hydropower is a nice combo. The benefits have been well spread across society. They manage to present themselves as poster-people early EV adopters whilst continuing to keep their hydrocarbon production at the same level the last 25 years. They retain the jobs, tax revenue, skills, exports. It could be argued they export carbon emissions through the hydrocarbons they export and others use to make things Norway needs to import. But, if Norway did not provide the hydrocarbons these other countries would still import them from elsewhere and with a likely higher carbon emission associated with the production element of the hydrocarbons. Well played and good luck to them I say. UK take note.

Could the new Energy Minister be a convenient , loyal and obedient post-holder to push thru Sunak’s wishes? Clearly she is good with numbers and the trade-off of an uncomfortable ride for a year for a massively raised profile should be worth it for her. My feeling remains something is brewing to make the landscape more favorable for oilies sooner rather than later. I accept a dose of cognitive bias with a dollop of wishful thinking could be influencing by thinking.

Stanley would be ecstatic!

Stanley would be happy :) :) :)

From the RNS:

“We are pleased to have secured this source of financing to extend our debt maturities AND build optionality within the balance sheet as we look to support accretive growth opportunities.”

Sekforde, Aim. It could be for both covering a potential shortfall and for investment. To open the “pot of gold” tax credits an acquisition is needed of reliable production from a company without tax credits and looking to reduce their exposure to the UKCS. Something coupled with existing production and the opportunities to increase allows EnQuest to gradually use the tax credits while the EPL is in place. And should the EPL be changed before 2028 so much the better.

I recall seeing a video of Sunak last year all pleased with himself that he could tell oil industry people he was learning the jargon and learnt what UK Continental Shelf meant. It was at this basic level.

Fair enough, Sekforde, I retract my doubts, and of course it is your business how you decide to diversify or not your investment portfolio.

Sekforde, statements starting “honestly” raise my spydy-sensors. Not my style to make personal attacks, and this is not

meant to be one, and next to nothing any of us post here changes EnQuest’s value, but… hard to take seriously comments from an investor 100% In hydrocarbons, and almost all in the NS. I call BS or naivety. Happy to be proved wrong.

3dart, again regarding the Treasury inviting major banks to a meeting this Friday, why would they be doing this now if the plan was to not actually enact anything until after the next GE to give a acceptable and stable fiscal policy? In other words, this meeting supports the thesis enacting said policy is being fast-tracked.

This meeting and my earlier today jovial yet deadly serious posts are directly linked.

3dart, the gold-eating monster has overplayed its clawed-hand. The guardians of the secret to open the pot of gold are wary of enabling the release of the catch. They and the owners of the pot of gold will want in place protective measures with cast iron guarantees before proceeding. Both know without them the gold eating monster will go hungry.

Jan, dunno, no label on the tin, probably the weed is Albanian.

Imagine you own a pot of gold worth around £1B, but… you can’t open it. Every year by some strange chemical process 8% or so of the gold just evaporates into thin air. An acquaintance offers you the secret to open the pot, allowing the gold to be released over a number of years. But in return they request a share of the gold, maybe 30%. You can use the promise to give them some of the gold which will be released as payment for their services. And as a by-product of the offer you also retain some new property which, although requiring maintenance should give a decent ongoing rent. OK, there are some other details and risks, including a gold-eating monster who must be appeased, but this is the basic proposition. Would you just wait until all the gold evaporates away or would you seek to access the secret to open the pot?

Having said that :) … it is also possible Sunak & Co prepare everything but don’t legislate and instead make it one of the big issues at the core of their General Election campaign. Why gift Labour the chance of the opportunity to maintain a no new licences stance while at the same time inheriting a pipeline of new

field developments and the good stuff that would go with that?

And, Tommo, that’s why it’s highly unlikely there will be any major new investment in the UKCS before…here has been the announcement of an acceptable long-term fiscal regime together with protective measures to ensure stability for the investors.

The UK government knows this too, which is why I’m betting on an announcement about this to be fast-tracked and made in Q4 23 or Q1 24.

Kraken, even without changes to the EPL, there is a route to the 60p party but only once there has been… the announcement of an acceptable long-term fiscal regime together with protective measures to ensure stability for the investors.

Kracken, after/as well as announcement of SH returns, the other catalysts for MC growth are, in likely order:

-announcement of an acceptable long-term fiscal regime together with protective measures to ensure stability for the investors.

-investment, benefitting from EPL incentives, to maintain/increase production at Kraken and Magnus.

-investment similar to above to develop B&B.

-M&A activity without cash-call on shareholders to increase production to accelerate value release from the tax credits

-announcement of the time and venue for the 60p party.

Sekforde, what you’re omitting, possibly conveniently, is that contracts would be structured such that upon government/parliament changes that would diminish the position of any of the other contracting parties, then there would be due appropriate… compensation.

A good week to all.

Sekforde, your comment means you think the solutions proposed in this article below, whilst certainly politically unpalatable, are also unworkable?

https://www.engage.hoganlovells.com/knowledgeservices/viewContent.action?key=Ec8teaJ9VaoHO3xXjHTBt17eOOGbnAEFKCLORG72fHz0%2BNbpi2jDfaB8lgiEyY1JAvAvaah9lF3dzoxprWhI6w%3D%3D&nav=FRbANEucS95NMLRN47z%2BeeOgEFCt8EGQ0qFfoEM4UR4%3D&emailtofriendview=true&freeviewlink=true