Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Papegoja, good question, 15% of Bressay or of EnQuestâs share of Bressay. I wonder why on the EnQuest website it says âEnQuest is the [not âan] owner and operator of the Bressay field having acquired an interest in it from Equinor in January 2021.â
Reflecting on what someone underlined earlier, B&B together have some 245mb of net 2C resources. Thatâs an enormous amount (not sure if a completely valid way of visualising it, but is 34,000mboe/day for 20 years) and the path to extraction it is becoming clearer all the time. And, as I understand, without any new primary level, and attention grabbing, licencing requirements.
Hedging
§ For the last two months of 2023, the Group has hedged a total of c.1.5 MMbbls. Of this total, c.0.7 MMbbls relates to put options with an average floor price of $60/bbl, while the Group have also entered into c.0.8 MMbbls of swaps at an average price of $88/bbl
§ The Group has hedged a total of c.3.5 MMbbls for 2024 and c.0.2 MMbbls for 2025, predominantly using put options at an average floor price of c.$60/bbl
Looks like the agreement on the wf tax was watered down once implemented in the countries.
https://www.euronews.com/my-europe/2023/10/30/windfall-taxes-on-european-energy-companies-weakened-by-intense-lobbying-says-new-study#:~:text=In%20September%202022%2C%20the%20EU,over%20the%20previous%20four%20years.
Thanks, Modestus.
I did/have not followed what the EU did regarding windfall taxes. Was there an EU-wide windfall tax (how would that be policed and collected?) or was it an EU-wide policy agreement then requiring each country to implement it as they saw fit?
Stevo, thank you for your response today at 1324. Very helpful.
As you pointed out at your point 3, I mistakenly calculated RFCT/ST on the figure after EPL had been applied instead of on the full taxable profit, irrespective of the EPL.
On the 50% of losses restriction, my understanding is this is a general rule applicable to all companies, whatever their activity. I imagine you are, but could you confirm pls youâre sure on your point 2 that the 50% restriction of loss utilisation, for the reasons you explain, does not apply in the O&G sector where losses are utilised on the same activity as where they were incurred?
6ish years falls, just about, within a reasonable definition of âseveralâ.
Iâd like to understand whether IR is being as sufficiently clear/accurate as I would like with their comments regarding tax losses and their use.
Craig states âat 30 June 2023 we had c.$2.3 billion of historic tax losses immediately available as an offset to taxable profits, while we expect to satisfy the conditions necessary to book the $1.3-1.4 billion of losses associated with the Bentley asset at the end of 2025 or into early 2026. Utilising the cash flows from our current portfolio will certainly take several years to extinguish these losses but we continue working to accelerate the benefit of these losses through accretive M&A."
My understanding is
1. these âhistoric tax losses immediately available as an offset to taxable profitsâ represent approximately $920m of tax credits
2. the amount of group profits which can be relieved by carry forward losses in an accounting period to 50 per cent of (group) profits over ÂŁ5m,
3. Utilising the cash flows from our current portfolio a reasonable estimate of annual EBIT going forward without any M&A could be $500m,
4. after EPL at 35% this would be around $325m,
5. RFCT/ST at 40% on 50% of this $325m could be offset by using $65m ((325/2)*40)) of the accumulated tax credits
6. $920m of accumulated tax credits/$65m used per year = 14 years
Craig states âutilising the cash flows from our current portfolio will certainly take several years to extinguish these lossesâ. âSeveralâ in my mind means in the range 3-5, yet it looks to me that if nothing changed it would be much more accurate to at least say it would take âmanyâ years (up to 14 according to my calculation) to extinguish the historical losses.
Are my calculations and conclusions ballpark accurate? It may seem like this is nit-picking and about semantics, but my objective is to understand whether IR, and the company in general, is as being as candid and clear as I would like regarding the tax losses/credits and their possible use and value.
Oxygen, your comment âwhy now appoint a new CFO, who will have sought security of tenure, given it transpires Salman Malik had a natural route elsewhereâ is logical and reasonable. As well as a past as as an energy analyst, JC also has extensive M&A expertise. Could EnQuest be looking more to buy than be bought, predator not prey? Then we have Malcyâs endorsement Loch just posted about. Interesting and positive feeling times indeed. By end Q1/24 all should be clearer. OK, that comment is also only speculation đ
"Welcome to the Harbour Energy 2023 Half Year Results presentation. The live webcast took place at 09:30 BST on Thursday 24th August 2023 and the ondemand replay is now available to view."
https://www.investis-live.com/harbour-energy/64d0d05d0120c60d00dae9fd/hdrt
Ancient, miles, thanks for your comments re possibility of a Harbour/EnQuest link-up.
Yes, ancient, from Harbour's stated expansion strategy inorganic growth in the UK is not on the menu. I assume LC would not want to be seen to be considering investment in the UK until and if any decision to do so was announced.
As you wrote, miles, there are indications at E that they are re-arranging things possibly to facilitate some sort of M&A activity. I did not know it was pretty sure EnQuest had approached Harbour earlier this year. A tie-up between the two allowing a faster use of E's tax credits would not reduce the EPL charge but until they last should remove the 40% tax from RFCT and SC. The introduction of the ESIM's with its EPL price triggers CPI index linked from April 24 has improved slightly E's RBL position, but an E/H combo would greatly improve RBL conditions and allow re-financing to lower borrowing costs.
Thanks again.
Rookie1 and others, could a merger of some sort or other between Harbour and EnQuest be in the works? Apart the synergies and economies of scale etc, such a merger could create value by releasing faster the value in the $2.4B of so of tax losses at EnQuest and reducing their financing costs. Does anyone from the Harbour side of things have any insight or has seen something indicating M&A between Harbour and EnQuest could be on the cards? Or indeed anything indicating no way such a deal could happen. Wild guesses OK too đ. Thanks.
Wow! I am positively impressed I will get a reply and the speed of the reply.
âthanks for getting in touch.
Just to check we file your email correctly, please can you confirm if you are a constituent contacting Anneliese as your local MP for Oxford East?
In any case â a response will be sent to your shortly. Thanks!
Office of Anneliese Dodds MPâ
Auto-reply: "Due to strict parliamentary protocol, I am only able to deal with enquiries from constituents of mine in Oxford East. "
"If you are not a constituent, and are emailing me in my capacity as Labour Party Chair or Shadow Secretary of State for Women and Equalities, please email anneliese.dodds.mp@parliament.uk. Please be aware that there may be a long wait before your correspondence is answered. "
I'll re-send my email to anneliese.dodds.mp@parliament.uk - it can do any harm.
Maybe we should all email Ms Doods stating our interest in this matter and asking for the original source for the 9X cheaper information. Not sure if is the right email for such things, but I have already emailed her at anneliese.dodds.casework@parliament.uk