Member Info for mrc_mrc_mrc_mrd

https://www.lse.co.uk/rns/SQZ/corporate-update-ryyzbkn2qvz053k.html

Discussing levy.

Bressay has value in ENQs hands IMHO. Not convinced we will have people queuing up to take our stake and operator status.

Ithaca have said it accelerates their plans. If we can sort out the refinance then we are in a similar position to be able to spend big in 2023 and 2024. Refinance is the key.

Appropriation can happen anywhere. It has already happened here so I see this as the bottom. You can argue the very idea of it will kill all investment and you might be right, but with the world as it is I think the U.K. remains attractive.

As far as ENQ goes I think they need to continue deploying capital in the U.K. They should certainly kick up a fuss with a view to gaining concessions before this becomes law. But I think your realpolitik extends to ENQ. We have infrastructure, relationships and expertise in the U.K. which we wouldn’t have in other jurisdictions. It’s a ****e state of affairs but these are the facts on the ground.

Jackdaw is encouraging that we may now have a good chance of developing Bressay. I’m not sure that would have been possible a few months ago. So we have some more tax but less tight regulation. Developing bressay will minimise tax and set ENQ up for the 2nd half of the decade.

I suspect even without these soft advantages of our UK inertia, the UK is still a favourable place to invest.

Sorry Chilting but I have my ear to the ground on such matters and would disagree with you.

There is zero chance that industry will be anywhere close to net zero by 2030.

If you can list these projects then I would be happy to discuss.

“ I think big industry will be the first to move away from carbon”

Chilting, please explain how this will be technically achieved? Your utopia sounds fantastic.

Chilting to be fair you think oil extraction is unviable beyond 2025. PMSL.

He seems to have lost a lot of Twitter followers?

Maybe times is tough and he’s stopped paying the bot farms?

Always dangerous having a leveraged position on over the long weekend. Seems like Ammu might be a little exposed to this news.

https://www.ft.com/content/bb130bb9-4b75-4626-961a-2c1ed9b0e7f9

This article gets to the nub of it IMHO.

“Saudi Arabia and other Opec members remain concerned about the level of spare production capacity available so are still hesitant to raise production too quickly, fearing the current tightness in the oil market could become an outright shortage later in 2022.”

I think refinance.

If they get that away it frees us up to get after Bressay quickly and mitigate the levy impact. I see Ithaca are planning to accelerate their projects. Rishi has done enough I think to force some investment decisions.

TLW have bought cash which they need because their debt is unsustainable. CNE lost their way and their hunger.

Do 2 sick companies make a healthy company? This looks more or less like a tullow fundraise.

So they are buys then…I guess people who know that might have been mopping up shares in anticipation of flipping them at close? Can’t imagine there would be that sort of volume on the order book available at a 2% premium normally?

So we now have approx 3% of the company held by tracker funds and basically removed from free float (assuming another fund wasn’t on the other side)

Stupmy - my comment was about the legislation. I don’t expect an RNS. I’m sure they will be asked about it at the AGM.

My view is we might end up with something written in to define when the tax will be retired (E.g. a low enough oil price). That (and the inability to use losses) is what took the industry by surprise.

If AB is really in there then maybe heavy oil field losses will be allowed :)

I think we would have been at 40p without this drumbeat leading up to yesterday. So 25% wiped off IMHO.

As I’ve said I think that is overkill, so would disagree with you Martinen.

People are selling for reasons other than the direct discounted impact over the next 3 years. My view is this should settle above 30p.

Potentially some walking back to be done when the actual bill is introduced. We still have cabinet members on our side and the case will be getting made by the industry to dilute this.

I think the worst case is more than priced in at 30p.

ENQ are planning Bressay development with first oil in 2026 I believe. It is heavy oil so has some additional tax benefits I believe. I don’t see ENQ paying more than single digit % in tax in 2023-25.

VOR - I can see potential for some tweaking by GOV so hope ENQ are putting the case. Maybe something for small / old fields, or heavy oil. The political gains here are in hammering BP and Shell. Disproportionately hitting small unheard of companies that are the future of a declining North Sea is rather foolish

Jeffries will have a proper model. Of course we don’t know what assumptions they have made, and they don’t cover ENQ with a price target.

I think year 1 should really be the one that matters. ENQ have not been given a chance to plan their spending as this has come out of the blue. Also still somewhat restricted by need to refinance debt. Once debt is refinanced capex spend can ramp up on bressay if that is what Enquest feel is best.

In my view ENQ have no choice but to give the chancellor what he wants. More investment.

“EnQuest, which ended Thursday's session 7% down, dropped a further 9% on Friday morning to lows last seen in late March. It is expected to pay an extra $14 million this year and $73 million next year, Jefferies said.“

Gives me a little more confidence in our fag packet calculations.

Seems ENQ are quietly ignoring the hedging requirements anyway. No new hedges since the start of the year as far as we know.

Interesting they mention lease costs in the technical note, hopefully another qualifying expense for Kraken.

I would hope we might get the rate down to 10%. The U.K. tax regime is still quite favourable and ENQ have built up a good business here. I don’t see this changing what we are doing. It may even have a silver lining of making deals more likely.