RE: The value is in the tax credits13 Jun 2022 11:19
I, of course, do not know what the ideal mix of options are for extracting best value from the $3B of UK tax credits. Enquest management are the ones who will know this best, which is why I suggest asking them at the AGM. I do know, however, that understanding this, or not, will be a major factor in informing my decision on what degree to remain a LTH. Tigar, mrc, I come round to your way of thinking – mrc, including your Saturday 17:31 post. To utilise the tax credits requires UK production revenue – therefore buying “suitable” UK production would seem logical. But, more profit would also mean more Windfall Tax to pay. To mitigate the Windfall Tax will require investment in new production, not buying existing production. It gets complicated… yet there must be some optimal mix of buying existing short-cycle production to utilise sooner some of the tax credits, and activities to mitigate the Windfall tax as well as to consume some of the tax credits remaining. Then, the question is whether this optimal mix can be matched with commercial realities/opportunities. Maybe it will have to be accepted that in buying production to utilise the tax credits an outcome would be paying more Windfall Tax? Accepted it is early and not possible for the company to be precise, but they could give an indication at what direction they are thinking of taking. Could this be “commercially sensitive”? I doubt it. Whatever, it gets back to my understanding that utilising the tax credits is absolutely key to Enquest’s value, and therefore I want to know more from the company on this aspect. If my understanding is wrong and/or the I if the company does not want to be help investors understand how the value of the tax credits can be released, then I want to know this too.
(I will be outside the UK on 17/6/22 – so grateful if any attendee of the AGM could ask a question about this. Romaron, please?)
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