Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
no news but Borr Ran just signed up to a new contract starting only in Oct-23 in Mexico with Fieldwood Energy.
Recent statements in Mar-23 from WintershallDEA still show Kan and Ix as part of their portfolio.
so fingers crossed...
I think it's clear the carbon capture side of things requires government funding. Endurance was meant to target both Teesside and Humber but only Teesside + Liverpool bay got the go ahead this time. It's also likely that Endurance will be able to handle some Humber capacity.
I think Viking is at risk if you look at some of the other plans that might take precedence over industrial carbon capture like hydrogen. Acorn is a shoo in unless Scotland breaks free.
Look at NSTA website and you can see a strong emphasis on the Bacton hydrogen hub. Location wise, it seems ideal as it lies between Humber and London and there's this pretty big depleted gas field operated by Eni that is really close to shore, which they are already thinking of converting into carbon storage.
I would say if HBR thinks there's any value in CCS, try and divest it now when it's still popular.
Nitro, East Coast Cluster is the Endurance project by BP, Equinor, Total & Shell injecting into an aquifer whereas Harbour's injecting into the depleted Viking gas fields. I think they are trying to re-use the old Conoco gas pipeline (LOGGS).
The problem with enquest is the very high opex due to the nature of their operations. While there's great potential 2c resources in Bentley and Bressay, it will be difficult to develop concurrently with an unstable government.
With oil price dropping back down to the 60s, I hope HBR will consider reverse merging into Kosmos which is US listed, has great reputation in the oil and gas industry, has significant future 2p reserves + 2c resources and will achieve ~100kboepd production by 2024 with the GTA start up!
I'm afraid any changes to EPL will only be reversed by Labour, you've already seen how strongly Labour has responded to the lifetime pension allowance. So why risk another distraction?
Money will be better spent investing outside the UK now in a less hostile environment. In fact, it's also time for HBR to consider relisting in the US/Asia so we will be out of the socialist news loop here.
20B over 20 years,. I think possibly a mechanism to have a fixed floor price for CO2 I think or a guarantee to purchase CO2 credits/subsidise CO2 offset taxation... so no real spending by the government.
If say, £50/t of CO2 of tax credits can be achieved and HBR's Viking CCS can store 10Mtpa, that's £500M/yr of tax credits applicable to both the EPL and ring fence tax! This move will instantly give value to CCS industry and would certainly pay off for HBR!
https://www.upstreamonline.com/exploration/shooting-fish-in-a-barrel-harbour-energys-latest-deep-water-exploration/2-1-1418199
Bampo gamechanger? 13-15 Tcf estimated!
Some good points from the call in my view:
- LC very vocal on the EPL & AK has shown very competent knowledge about financing an acquisition
- Recognised risk of Labour increasing tax further & removing the tax breaks
- Definitely no more UK assets acquisitions
- Clear understanding of the CCS business uncertainties and hinted to me there's still opportunity to give up Acorn (IMHO)
- Also acknowledged shareholders who have been holding on for so long
- Material ~499MMbbl addition of 2C resources for Timpan & Tuna
- Also acknowledged 2P reserves should have been higher
From what I gather from the Q&A session:
- Their criteria has not really changed from before i.e. buy cash-generative producing assets (>50kboepd) with nearby opportunities and in fiscally stable countries + "oil-friendly" countries
- Might be mistaken but did AK say M&A could increase debt and push leverage to >1.5 temporarily until 2024 (so >6B incl. existing debt acquisition???)
- Target might be based in the US since they have been doing some groundwork for financing there...
- Norway still an option...not aware of anyone else selling besides Shell?
did I miss anything else?
https://www.energyvoice.com/oilandgas/north-sea/487933/windfall-tax-an-incentive-for-north-sea-operators-to-phase-delay-spend-report-finds/If the investor has incurred his project investment costs prior to 26th May 2022 and has substantial income in the period 2022-2025 the EPL 2 has a major negative impact on his post-tax returns. The negative effect is particularly pronounced when the income subjected to the EPL 2 occurs in the early years of the producing life of the field.” ... that's Tolmount?
https://www.businesswireindia.com/eig-completes-acquisition-of-25-of-repsols-entire-global-upstream-business-83367.html
EIG Completes Acquisition of 25% of Repsol’s Entire Global Upstream Business
Friday, March 3, 2023 11:10AM IST (5:40AM GMT)
EIG’s Breakwater Energy acquires stake for $4.8 billion
Washington, United States:
EIG, a leading institutional investor in the global energy and infrastructure sectors, today announced the completion of its acquisition of a 25% interest in Repsol Upstream, a newly-formed, gas-weighted exploration & production company comprising Repsol’s entire global upstream oil and gas business.
Breakwater Energy, a wholly owned subsidiary of EIG, acquired the 25% interest in Repsol Upstream for total consideration of approximately $4.8 billion, including debt, with Repsol holding the remaining 75%.
Repsol Upstream owns and operates Repsol’s globally diversified portfolio of upstream assets, comprising more than 600,000 boe/d of production and operations in 15 countries, including the United States. The portfolio generates significant free cash flow that should support a meaningful dividend, while also maintaining relatively low carbon intensity versus peers. Both Repsol and EIG foresee the potential to list the business in the United States from 2026 onward, subject to favorable market conditions.
.. the endgame?