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Another common sense article re O&G investment - read a few of these the last couple of days….
“Investment in new oil and gas production will still be needed in the energy transition as demand will still be there over the next few decades, Mark Carney, former governor of the Bank of Canada and the Bank of England, said in an interview….”
https://oilprice.com/Energy/Energy-General/Carney-New-Oil-Gas-Investment-Is-Still-Needed-In-The-Energy-Transition.html
“ I’m a Tory MP, but I can’t let ministers trash our net zero pledge with the Rosebank oilfield.”
Net zero? More like nut zero :o(
https://www.theguardian.com/commentisfree/2023/apr/25/tory-mp-net-zero-rosebank-oilfield?CMP=Share_iOSApp_Other
https://www.londonstockexchange.com/news-article/CNE/cost-base-update/15888891
Apologies if already posted….
https://www.bbc.co.uk/news/uk-scotland-scotland-business-64900766
It is an ESTIMATE of future tax expected to be paid if current circumstances continue. Is is reviewed at each balance sheet date. If oil price drops to $10 per barrel, the provision would be reversed, giving a credit to the income statement. Here is their accounting policy:
“Deferred taxation is recognised in respect of all timing differences arising between the tax bases of the assets and liabilities and their carrying amounts in the financial statements with the following exceptions:
Deferred income tax assets are recognised only to the extent that it is probable that the taxable profit will be available against which the deductible temporary difference, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the reporting date. The carrying amount of the deferred income tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. The Group reassesses any unrecognised deferred tax assets each year taking into account changes in oil and gas prices, the Group’s proven and probable reserves and resources profile and forecast capital and operating expenditures.
Deferred income tax assets and liabilities are offset only if a legally enforceable right exists to offset current assets against current tax liabilities, the deferred income tax relates to the same tax authority and that same tax authority permits the Group to make a single net payment.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.”
Deferred tax is an estimate of future tax that will be paid in the business on future assumptions such as oil price, production (I.e. profits) using current tax rates in force. It is not definitive and can change upwards or downwards as oil prices change or as tax rates change.
“At 31 December 2022, $81.5 million of arrangement fees and related costs remain capitalised (2021: $136.4 million), of which $20.2 million are due to be amortised within the next 12 months (2021: $43.6 million).”
These have been offset against the $0.8 billion to give $0.7 billion. Net debt = $0.8 billion.
“In the immediate future, we remain focused on deleveraging and intend to prioritise organic investments with quick pay backs and accretive M&A opportunities that allow us to leverage our operating capability and tax loss position."
“Accretive M&A opportunities that allow us to use our tax loss position.” Surely not more investment in the North Sea?
Is it not on the balance sheet in the form of a deferred tax liability?
https://energysavingtrust.org.uk/advice/wind-turbines/
Am I reading this correctly? A £31,000 investment to save £610 a year?
Costs
The cost of a system will depend on the size and the mounting method. Building-mounted turbines cost less to install than pole-mounted ones, but they tend to be smaller and less efficient. For equipment and installation, a 6kW pole-mounted system costs around £31,000.
Savings
A well-sited 6kW turbine can generate around 9,000kWh a year, which could save you around £610 a year on your electricity bills*. The renewable energy generated could also save around 1.9 tonnes of carbon dioxide a year.
Apologies - link didn’t work. Just ignore my last post.
Try the subsidiaries - “Tailwind Energy Chinook Ltd” had unutilised ring fence losses of $757 million.
Thanks both - long time since I have looked at this (15 years?).
Presumably the amount of losses Tailwind estimated they could use at YE 21 was based on oil / gas price assumptions? Per the impairment testing in note 11 this was $74.1/bbl for oil in 2022 and 72p/therm for gas. Assume they would use similar prices for deferred tax. Higher price estimates now may mean more of their losses could be used going forward….
Could the combined entity not carry back the losses for one year against SQZ’s 2022 profits?
Introduces Mercuria as a strategic investor with a 25.2 per cent shareholding in Serica
· Serica will benefit from the availability of Mercuria's financing and hedging capacity combined with its wide geographic reach
· Relationship Agreement between Serica and Mercuria will govern ongoing relationship
· Two Mercuria nominated non-executive directors joining the Serica board on completion[5]
Reinforces Serica's financial strength
· Highly cash generative portfolio and expected to have a significant net cash position on completion
· Existing Tailwind reserves-based lending ("RBL") and junior facility expected to be rolled over on completion[6] with subsequent refinancing to take advantage of the increased strength of the enlarged group during 2023
· Markedly lower decommissioning liabilities compared to North Sea peers
· Dividend policy to be maintained
· Tailwind holds significant ring fence tax losses carried forward for future use
Combines the two companies' complementary leadership, technical and commercial expertise
· Tony Craven Walker and Mitch Flegg remaining as Non-Executive Chairman and CEO respectively
· Steve Edwards and Jacques Tohme will be joining the senior management team
· Serica's North Sea operating capability combining with Tailwind's sub-surface expertise
· All current Tailwind employees to be offered positions in the enlarged group
Creates an enlarged platform from which to consider future investments in the UK, overseas and in the wider energy sector
· Greater financial capability of the enlarged group
· Enhanced and complementary skill sets
· Strategic shareholder with a wide geographic reach and extensive activities in the broader energy sector.