Member Info for garyn

I was under the impression that tax losses relate to specific assets/fields and can’t just be used to offset profit from other assets (the Enquest tax losses couldn’t be used against Serica assets as far as I’m aware)?

Trading statement is on Jan 31

Concerns over Montara are partly why it is trading where it is - the field life has already been shortened, which brings the decomm liability closer and also means it generates less revenue over its remaining life to cover that. I suspect some might also be concerned over the size of writedown we will see of the Montara assets in the accounts and the net loss that will show on paper (non cash), especially if they don’t bother to look at the actual cash flows.

I don’t really think you can blame it on the management too much - the issue is that the FPSO is rubbish! It’s not like it was even that old when Jadestone bought the asset (I’d have to check but off the top of my head I think the FPSO was built in 2013 and should have easily lasted longer than it has done). Plus of course after the first issues, it was independently inspected (by a govt organisation) and even they didn’t pick up on there being any further problems that needed fixing at the time.

What it does do though is adds risk that it won’t even make it through until 2030.

Mistakes have been made by the board but I don’t think you can blame them for everything that has happened here.

The issue with Montara is the size of the asset writedown we are likely to see (non cash though) as well as the reduced cash flow it will now produce over the life of the asset (shorter life and lower production), plus of course the decomm liability will come sooner (on an asset that will have generated less money than had been expected).

I think things will look very different though by 2025 with the diversified portfolio it now has and increasing production. I’m holding for that recovery, hopefully back to a position where it once again pays dividends and has enough spare cash to carry out buybacks as well.

In terms of the accounts this year - I expect a substantial net loss to be reported, but with positive net free cash flow (just depends how many actually look past the net loss - any serious investors will of course, IIs etc).

Possibly the market is wary of the reaction to the net losses we are likely to see in the future accounts a result of the write downs we will see on the value of Montara - with production ending earlier than planned, plus of course the decomm costs coming sooner and the asset having generated less revenue over its life?

The net cash flow will tell a different story though I think and will be a lot more positive (the writedowns are of course a non-cash item).

Sadly they would need to find a counterparty that is writing calls at the higher prices, or who would take an out written by I3. The spot prices in recent days should definitely help the monthly average price that I3 sell at though, even if it is unlikely to last for long (weather forecast is for a return to more normal conditions over the coming days).

Bear in mind that he may have been made inside before they agreed to speak to him? I don’t know that for a fact but wouldn’t be surprised and would be fairly normal practice - otherwise the conversation would seem pointless if all they could discuss was what was already in the public domain anyway!

I avoid posting on here usually as I know my opinions have never been popular on this share, and am not looking to get into a long debate!

The Atlas holding is from the conversion payment shares - they sold 45 million already. In yesterday’s RNS when the company issued 305 million shares they told shareholders to use the enlarged share capital figure of 1,344,370,498. If you add the 258 million to the 45 million already sold by Atlas, that is almost exactly the number of new conversion payment shares that were issued yesterday morning and is no coincidence.

Unfortunately as I mentioned at the time, I suspect the guy in the flaring video was referring to total fluids being produced (including water cut), which would have been about right for the time of the hearing? Lots has gone on here, but with a lot of it the finer details haven’t been inaccurate - just the headlines have potentially been misleading and many didn’t read beyond those!

On March 28 you posted that it was all over for PFC and it was going to zero, when it was trading at 46p; and on March 27 you said 888 was a zero as well (the SP was 54p), so I wouldn’t place too much faith in your predictions! Everything depends on the outcome of the conflict and how long it drags on for.

Makes absolutely no difference as long as the Sonangol part of the deal also completes - Afentra has effectively been earning cash flow (deducted from purchase price) since the effective transaction date.

My article on this situation wasn’t there to scare anyone - I actually think suspension is better for holders until the situation is eventually resolved and the market knows the full facts. Potentially this comes under force majeure, I believe.

Could get interesting if these companies at some pin t decided just to hand back licences if it was no longer worthwhile producing due to the taxes leaving minimal or no net profit, and left the U.K. government to sort out decommissioning? Could the companies claim some sort of breach of contract over the original decommissioning terms as a result of the windfall tax, which totally changed the fiscal regime under which they operated, and would likely have impacted upon their original feasibility studies and final investment decisions at that time? I believe a lot of the decommissioning contingency funds are built up over time right up until the end of field life - so if these licences were handed back with years still to run potentially, and no one else was willing to take them on, then there would be a shortfall in the money that was there to decommission them? Obviously oil companies would only do that if it no longer made financial sense to keep producing - which is a possibility with this tax in place during periods of lower oil prices!

I’m guessing that Ed would rather that companies invested their money in oil and gas projects in other countries instead, and isn’t bothered about potential job losses that will cause in this sector in the U.K.?
Plus of course, he will be happy to see the U.K. having to buy more of its oil from countries such as Norway, which have a far more sensible tax policy that benefits both the oil companies and its govt/citizens, when these oil companies decide to invest there instead. So not only will the U.K. miss out on investment, employment, and tax revenue, but will also have to increase imports to meet our demand.
Plus of course, some of the projects involving wind turbines, carbon capture etc, are reliant on investment from these same oil and gas companies that he seems so keen to make the U.K. as unattractive a place to invest in as possible!

Only needed more than 50% - it was an ordinary resolution, the cancellation was a special resolution and required 75%. Worst possible outcome for holders as now most of the proceeds will be eaten up in fees and costs, and if it does continue they’ll be diluted to oblivion when more funding is raised!

Especially as the selling of those shares related to the distribution of them by EIG last summer, and the resulting tax charges that generated - with the sale of that number of shares, to cover those tax liabilities, having been agreed.

Possibly TLW would be a better bet than Kosmos anyway - certainly for the African assets? Given the position that company is in and the price of its bonds currently (YTM seems to suggest some doubt over its ability to refinance that debt as well, and certainly that it won’t be redeeming the bonds when they’re due!) - might get a good deal, assuming of course Harbour had any interest in those assets?

That very much aligns with my own thoughts. Totally agree about Equinor as well - they’ve just sanctioned the $9 billion plus Bay du Nord project in Canada as well. So if they’re looking to make best use of their capital, then currently U.K. projects look far less attractive.
From what I’ve seen, the way Norway treats the oil and gas sector is a good and fair way of doing things - benefitting both the companies that invest in these projects, as well as the Norwegian population in ensuring they benefit from these natural resources and the revenue generated from them.

PanamaBob - assuming that John guy was telling the truth about his trading group and being in with a guy called Naim (no guarantee he really was of course!), then you might find his name crop up on one of the Form 8.3s that ITS issued as a few of them were heavily in that before the recent bad news about the sale of the company…
Wasn’t going to post any further comment on here, but as seeing as they seemed happy to try and pretend to be me, thought that might be of interest!