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If you consider the hedging situation, it's even worse!
Instead of a talos merger, setup an oil trading desk based outside the UK eg Singapore/Indonesia, sell hedges for all the production at breakeven prices e.g. $30-40/bbl to cover opex + financing costs to minimise UK taxes and then extract profit overseas that will contribute to overseas expansion.
However, a Treasury source pushed back against suggestions the policy would be changed again, arguing that the tax’s floor had been set at a “fair” level.
“As long as there are windfall profits, there will be a windfall tax,” the source added. “We think we have got the balance right.”
Do we have XR/JSO sympathisers in the treasury now?
The tax rate for oil and gas companies will only return to 40% if both average oil and gas prices fall to, or below, $71.40 per barrel for oil and £0.54 per therm for gas, for two consecutive quarters
...a non announcement I guess
Https://www.bbc.co.uk/news/uk-65730950
WFT likely to increase to 78% like Norway but without all the investment allowances. I'm thinking if they are aiming to get a piece of BP/Shell's profits they will likely need to tax overseas profits as well so the only way is to exit the UK completely. I hope Wael will lead the way first before the change in government is upon us.
Yes I agree Megla, there is also no financial incentive to continue with CCS either in the UK...
what are your assumptions on the upcoming redetermination of the borrowing base? FT speculated a 50% cut so it's going to reduce HBR's capability to buy international production significantly!
The real profiteers:
https://www.thetimes.co.uk/article/orsted-delays-cheap-energy-contract-hsztcrg28
UK taxpayers paid for their construction, yet they refuse to supply to the public when it's completed....
note Chrysaor initial funding was only $50M from EIG and $150M from Noble. EIG's 16% of HBR is worth £309M = $387M!
They are still in profit whereas the LTH, with quite a lot of bitter legacy PMO shareholders here are in a big loss! The government should re-open the case of ARCM's illegal shorting that led to PMO's demise.
Imagine the PMO portfolio without HBR's: Sea Lion, Zama, Timpan and now Kan + Ix! What a shame!
https://www.energyvoice.com/oilandgas/north-sea/497746/inaccurate-uk-government-figures-on-uplift-north-sea-oil-spills-report/
The UK Government has now confirmed that the freedom of information (FOI) statistics supplied to Uplift by the regulator OPRED (Offshore Petroleum Regulator for Environment & Decommissioning) were not accurate.
That’s in part due to clerical errors in FOI figures it supplied for Dana Petroleum, which were recorded as showing over 5,000 tonnes of oil spilled due to an inaccurate data set from OPRED. It should have instead shown 0.5 tonnes.
...OPRED fit for purpose?
https://watt-logic.com/2023/04/26/impact-of-windfall-tax/
Headline-grabbing “excess” profits were largely earned by oil and gas majors – large multi-national operators with assets round the globe. However, in recent years, these companies reduced their North Sea activities, being replaced by smaller, specialist operators such as Harbour Energy and Ithaca Energy. In addition, large companies such as Shell and BP have accumulated tax losses in the UKCS due to de-commissioning activities, meaning the windfall tax is having a lower impact on them.