Member Info for Dumbly

“This week’s announcements will build on the country’s world-leading track record which includes:

Supporting North Sea oil and gas, which each year contributes £17billion to the UK economy”

Https://www.gov.uk/government/news/energy-security-push-to-boost-economic-growth

Have they been reading our board? This should be an interesting week.

“The PM and his Energy Security Secretary, Grant Shapps, will meet senior representatives from the oil and gas, renewable and nuclear industries over the week.

Mr Sunak will vow to "put powering up Britain from Britain first", making the most of the UK's resources, reducing reliance on imported fossil fuels and investing in renewables technologies.

Calling energy security "national security", Mr Shapps said…”

“Guterres - A devout Catholic and a Marxist militant in his youth”.

He likely now sees himself as some sort of prophet sent here in n a mission to do God’s and Karl’s work rolled into one.

Would not sell for $600k or… $600m :) :) :)

EnQuest would not sell for $600k.

Harbour won’t increase exposure to UK with assurances regarding the forward fiscal regime.

Oxygen, can’t disagree with your view and no EPL change is the most likely outcome. However… without an EPL change how will Shapps have any chance of achieving his desire to “max-out” the North Sea? This includes Rosebank, and I can’t see Equinor agreeing to proceed without certain assurances.

Sekforde, oxygen, some combo of EnQuest and Harbour does look beneficial for both but… who would do any type of M&A activity involving UK assets without suitable assurances from both the incumbent UK government and the one in waiting. Cook, especially, must be thinking along the lines of twice bitten, thrice shy. Imagine a merge between the two companies and the the UK government tightens further the EPL conditions. I would want assurances of a watering down of the EPL before contemplating a merger. I suspect the further delay on Rosebank surrounds similar issues.

Yes, Therapist, a comment in the right direction but… it’s not in the government’s gift to deliver what Shapps wants. This decision is for the investing companies based on commercial viability. I still don’t see how companies will support this “max out” agenda without changes to the tax regime and assurances from the government AND the opposition.

Something has to give; either the objective or the current tax regime.

Oxygen, yes, you're right, see Annual Report pages 85-102:

"Performance share awards

2023 PSP awards

After due consideration of Business performance in 2022 and the performance of the Executive Directors, as well as other

factors, the Remuneration and Social Responsibility Committee decided to award a grant equal to 250% of salary to Amjad Bseisu and Salman Malik, to be awarded in April 2023. The Committee recognises the preference of some shareholders for an upfront reduction to award levels where there has been a fall in share price compared to the previous year’s grant. However, the Committee believes that making this assessment at the end of the vesting period, once all relevant information is known and the impact of potential ‘windfall gains’ can be more readily quantified, is preferable."

As I understand, the Awards are based on TSR (Total Shareholder Return), and this is calculated

"compared with the performance of the FTSE AIM All-Share Oil & Gas, also measured by TSR. The FTSE AIM All-Share Oil & Gas index has been selected for this comparison as it is the index whose constituents most closely reflect the size and activities of EnQuest."

So, looks like the Awards are based om SP of Enquest v the Benchmark of the FTSE AIM All-Share Oil & Gas. The SP could be terrible but as long as less terrible than peers the Awards would be awarded proportionally.

I am understanding this correctly?

Yes, Aim, a big bundle of shares announced yesterday as part of the 2023 PSP Award. 17M or so in total. Does anyone know when this award was agreed and the the conditions attached to it? It cannot be to simply be in the same position when the shares vest on 24 April 2026. What are the conditions in the event of a merger or sale etc?

Flash, PSP = Performance Share Plan? Such plans usually are to recognise performance and incentivise key management to stay with the business.

Did the award of these shares have any cost for the 3 beneficiaries? If not, hard to see how such an award represents a vote of confidence in the business by the awardees.

Flash, I have a similar feeling. AB could be clearer but he chooses not to be. He has his style and his agenda. I am not saying there is something sinister, but his agenda and timeline is not completely aligned with retail investors. A CEO without such holding/influence could not so easily behave like this. Nothing much to do but accept it.

Elitesky, romaron, having a CEO with significant share ownership should mean their interests are aligned directly with other shareholders but it is does not always work like that. Owner operators do not always act completely “economically logically”. This can also happen when a CEO has little direct ownership, but is harder and there are more controls. Sometimes owner operators treat the company as their own “play-thing”, and can influence others to follow their will. Something which to a pure-investor could look one way could look differently to a CEO/Owner who has other considerations. My impression, and is only that, is that AB is a highly competent and ethical fellow, but runs the company as a semi-private company and as much as a vehicle according to his own desires and needs as as a vehicle for the benefit of the other stakeholders. Who is there to hold him to account? The Chairman appointed by a board dominated by AB? Communication could be better, as we know. Funds don’t like vague and somewhat ambiguous statements. I’m not saying I am completely unhappy with the situation, but I think the narrative that as AB is a 10% or whatever owner that his interests are completely aligned with investors is flawed.

Romaron, regarding the FPSO NEO/JOG have decided to use, all guesses are good. It sounds like the decision will be known soon. However, one would imagine that the people working on the "warm stacking" of EP would have more than an inkling of what's going. "Warm stacking" just to keep options open and "warm stacking" because a specific destination is known, even if not communicated explicitly to the "warm stackers", probably have different characteristics.

Any detectives out there with some contact into Nigg?

Https://www.energyvoice.com/oilandgas/north-sea/516208/fpso-buchan-north-sea-jersey-neo-energy/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Newsletter%20AB%20Test%20%5BB%5D%202023-07-04&utm_term=Energy%20Voice%20-%20Newsletter

“… the EnQuest Producer FPSO remains docked in the Cromarty Firth, not far from the Buchan site.

EnQuest said in 2021 there was “significant interest” in the vessel.”

And it will fall further as production falls due to lack of new investment.

"Windfall tax revenue set to slump 40 per cent thanks to falling oil and gas prices"

https://www.msn.com/en-gb/money/other/windfall-tax-revenue-set-to-slump-40-per-cent-thanks-to-falling-oil-and-gas-prices/ar-AA1d5gbo?ocid=msedgntp&cvid=56e619e3bb8e4a69a3ae7de130b755e6&ei=19

The government after having stolen fair profits and part nationalised the industry through the excesses of the EPL now has to decide it if wants to become an investor in the NS. This investment would be through further changes to the EPL/ESIM to incentivise increased production on which the government will get more overall tax revenue (thru both the increased production and the related increase in GDP). A smaller cake with a higher tax percentage and screwed-up balance of payments or bigger cake with lower tax percentage and higher economic growth and GDP?

Both parties say oil and gas is needed – Cons say it with polices overtly supporting it, whilst Labour say it whilst also saying their policy is against it. Mealy mouthed wishy washy stuff from Captain Flip-Flop and the Red Lieutenant. If Labour wanted to stop oil production they could still do so thru fiscal policy – as Cons have shown so effectively.

So, what will it be Sunny and Jez, keep stating a policy which is clearly not supported by or feasible with your fiscal actions, and thereby leave Labour (and the country) in deep economic doo-doo, or make your fiscal actions fit with your stated policy? Energy is both the economy and national security. What could be more important for a PM? Take the lead and act Statesman-like or wimp out and surrender British jobs to Russian workers?

Https://www.thetimes.co.uk/article/a9de8f1a-1370-11ee-8fcc-23dc1e6b4441?shareToken=804efc9c2c4737a8393d3ef89d1beb4d

That’s about it, Aim. How can a super-tax be put on that part of received pricing below the long-term average? (Leave alone this average should be higher, separate both for oil and gas, and there is no super-subsidy when oil falls below the long term low average.) There will be a “Cliff Edge” drop in both production and tax income and an exponential increase in oil and gas imports. But by then Sunky and his pet snake will have slithered off into nice NED positions. The situation cannot be left to the short-term expediency of the politicians alone. National energy and economic security is at risk here. The industry, including figures as AB, need to shout louder and align with the other forces against this economic and dangerous idiocy. It really is a matter of National Security and should be shown as such.

Or, Sunky, as you ain’t gonna tame inflation any time soon and mortgage payments are only going one way over the next 18 months, call an election now and put energy policy as core element of the manifesto. Expose Starmer’s plan for no more licences for what it is. Show how encouraging investment with a reasonable fiscal policy in the NS can help repair the books through the increased GDP and tax receipts and decreased imports, and protect the country. You would have a better chance by calling an election doing this now than waiting until the end of next year. But yer won’t will yer, Mr Sunky drunky-on-power.

And I’ve not had my first drink yet today.