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More from the Times today: "Gary Smith, general secretary of the GMB union, said that government energy policies were “closing factories, hitting investment and hitting jobs”.

He derided claims by Ed Miliband, the energy secretary, that increasing North Sea oil and gas production would not benefit the economy, as “utter nonsense”.

Smith said he was concerned that such ideological zeal was, in part, responsible for a surge in support for Reform UK among GMB workers who were “angry and frustrated” about the economy and falling living standards.

Smith said that rather than benefiting British workers, investment in clean energy had mostly gone abroad."

Times today: "Sir Keir Starmer is preparing to cut spending on net-zero projects such as carbon capture and storage to pay for an increase in defence spending, prompting another rift with Ed Miliband, the energy secretary.

In an unusual move, No 10 has sidestepped the Treasury to tell government departments directly that they need to find savings of at least one per cent in their capital spending plans that fund investment in infrastructure projects over the next four years.

The cuts will help pay for Starmer’s long-delayed defence investment plan amid continued wrangling with the Treasury over the size of the uplift and how it will be funded.

The move to cut Miliband’s funding will reignite tensions with the prime minister after Starmer blamed the energy secretary for briefing against him in the wake of Labour’s disastrous local election results.

Miliband made it clear to Starmer that he felt his position had become untenable and has been privately backing Andy Burnham’s leadership ambitions. Starmer is said to have felt betrayed by Miliband, whom he saw as a close political ally."

Starmer has proven to be a poor judge. Anybody who would commit political fratricide could never be accused of loyalty. I hope Burnham is a better judge? At last Miliband is being held to account. A zealot doesn't have boundaries. You have to be as ruthless as they are. Kick him out Keir and show some b*lls!

An enjoyable interview https://www.youtube.com/watch?v=0FG9dYTEw4s of Mario Nawfal with Jeff Currie. I’ll confess to have never heard om MN but he has some big hitters on, and I guess it is to increase their penetration into a younger demographic. A lot of repeats from JC but each time you garner something new.

Some items I noted.

Seasonality – this is the best you can hope for with lower demand for oil before demand and later cold kicks in. Also, summer in the Gulf is not a good time to attack.

China – it was always about Energy Security NOT environment. In fact the environment is hardly mentioned any longer, and it is reduced to mentions of “clean” energy.

What is happening is not a disaster but a “rotation”. JC mentioned that in 2014 oil was in demand and you could hardly get anybody interested in Microsoft. JC will ignore the huge Tech IPO’s coming and a trader pal of his who does know the Tech sector well said he is enjoying the party but is “dancing by the door”.

Hi M - Point 2) is more telling than anything we are seeing from traditional sources imo and all politicians use propaganda to minimise the threats so cannot be trusted. Of course we'll all suffer with a recession as demand for oil has to fall and only those with the financial muscle or the actual product being the winners. Trafigura are one of the few companies who know the true picture and will clean up as countries resort to barter and CIPS to access Russian (and Iranian) oil. Two others who'll know the state of play are BP and Shell.

They will have told the Labour government but chances are that nobody is listening. On the bright side this should see the end of Miliband.

I try to follow both but they are in opposite camps on oil. I have lost some respect for Doomberg when he stated "coal is baseload but not dispatchable" which is fundamentally wrong. Coal does have dispatchability albeit slower than gas (ask China!). I'm sure Doomberg could defend the statement just as easily as Ed Miliband defends the cheapness and cleanliness of renewable which they aren't. BUT Doomberg is imo probably more right on the future oil price as after the initial jump we have this 'phoney war' period whereby we don't know it the Strait will open tomorrow or what other deals will be announced (Russian O&G etc..) There is precedence for oil shocks but oil generally gets reset at a higher level when it eventually gets sorted. What supports Doomberg is that both the US and Iran are hurting so a deal should happen and the likelihood is higher than an extended stalemate. We just don't know. Whatever happens I think EnQuest has a good 18 months of decent oil prices because inventory and SPR needs to be replaced + damaged infrastructure.

KO - we didn't really get a straight answer from AB at the AGM when I asked about "trading". I did point out that we now have the facility to leave more of our production unhedged because we have less RBL restrictions/obligations as we changed our balance sheet. We have no RBL borrowing at present but it was once $1.2bn. We are overwhelmingly bond based and that gives us much more freedom. It also means that the banks are much nicer to us now.

I would like the next AGM to be on video as well. I'd probably still attend but there are cleverer people than me who cannot attend who would make the QA worthwhile.

Https://dieterhelm.co.uk/energy-climate/the-cost-of-energy-and-what-to-do-about-it/

It is long but not as challenging as you might first expect.

"Government borrowing was £60 billion higher than the Office for Budget Responsibility predicted in recent forecasts, the spending watchdog said."

I'd say that was spot on compared to the claims, targets and modelling coming from DESNZ.

"The SNP has been like EastEnders. Marriages, divorces, feuds, rape cases, now robbery and prison. Friends appointing friends, friends marrying friends, friends falling out with friends, friends divorcing friends, friends stealing from friends. At no point do they question whether perhaps this is happening because it isn’t a good idea to have a tiny interlocking political establishment of friends and families in a country too small to have anything else." Daniel Finkelstein

Sort yourselves out guys. You're giving incest a bad name. It's bad enough down here without you lot joining in!

Good post Dumbly. With Serica fresh in our minds from their CMD yesterday they several times referred to the banking support and attendance of the bankers at the CMD. We sometimes forget just how important bankers are and the leverage that debt can give us. It is nice to have zero debt but it can also be viewed as a company out of ideas and opportunities. It is possibly the biggest reason we have stayed with EnQuest and"big" does = "transformational". Bankers don't sit around twiddling their thumbs and are an integral part of O&G because of the industry's size and appetite for capital and copex. I cannot see them not knocking on the doors of sellers and buyers or the bright young things with their latest derivatives or business plans not approaching the likes of EnQuest and BP. I realise a CMD and an AGM are miles apart but we have to get vicarious updates from another companies presentation. We have been sitting on these tax losses forever it feels. The balance sheet should now be in a position to utilise them. Debt might go up but so would reserves and we already have a decent amount of 1P.

Valid points Hunbah. Serica won the lottery with Rhum and since then have gone out of their way to win investors. So far this year they have had 3 QA's. We've had 1. I'm not counting the EnQuest AGM because they are poorly attended and have been shortened dramatically each year and I probably won't bother next year. More importantly they don't provide video access. Serica hardly reference their AGM and it didn't get a mention on their message board. The analysts don't bother with AGMs either.

I was particularly impressed that Serica had Fran Preston Bell their Public & Government Affairs Lead on their panel today. The SEA references are intriguing and that is one are that EnQuest has got right. They kept referring back to the OGPM which is a kinda hybrid PSC and protects the downside. There was a time when EnQuest cared more about the smaller investor but that was because they showed their loyalty at Rights Issues but that has now been forgotten it seems.

On the AGM the EnQuest IR had allowed a maximum of 1.5 hours for the AGM and the QA. He had to leave at 15:30 to get a train at 16:00. For a once a year opportunity to meet small PIs couldn't he have got a later train? What was so important that we were ushered out of the AGM fairly briskly? I hope some announcement comes shortly that explains.

I don't have a background in PR as you can clearly see from this post but I have family contacts in Strategic Consultancy and Media Research. I think EnQuest have developed an arrogance that outpaces their financial performances to date. A little more humility and attention to the smaller investor who may only hold a million or two shares would not go amiss.

*I am not an investor in Serica. My bet has nothing to do with EnQuest management but my feeling that early enactment of OGPM would double EnQuest's price. My bet is that sheer pressure and realism will bring a relaxation to the draconian taxation and hostility of Labour to O&G.

I did. Puts us to shame.

Work and Pensions Secretary Pat McFadden is facing a political backlash after leaked WhatsApp messages revealed him complaining that every meeting he had with Labour MPs focused on the question, "Who can we tax in order to pay benefits to others?"

Hi M - amazing that my memory can drag stuff back but often forgets why I went upstairs. In the video Nate Hagens tells Art that they haven't spoken for 14 months which probably ties into when I stopped listening to them. Hagens is possibly still a fan on NZ but Art has become much more philosophical and realistic. I am now more or less in agreement with him (AB) and he also agrees with Jeff Currie and Eric Nutthall. He didn't before.

I have come to the realisation that we are conflating the price of oil as all encompassing and forgetting that whilst important our investment is actually in an "Independent energy transition company focused on delivering energy security and decarbonisation". A price spike is nice but not enough to leave lasting benefits that really support a rise in price and a re-rating.

Presently we are being led by the nose by the front end prices whilst the forward curve is almost ignored. Yet it is the forward curve that the O&G companies treat as their bible because projects take years to first O/G and then last many more years. The planning is complicated, risky and expensive. Which brings me to what has been mystifying most of us on here. Why are we stuck around 19p. I think I have the answer and it is far better explained in this video - https://www.youtube.com/watch?v=UhZ7f9L9Lkw than I can do.

VoR mentioned a seller on the electronic systems and I'm sure it is backed up by brokers. The algos and black boxes are saying this and they win by weight of followers PLUS what the governments (esp.US) want and that is lower oil prices. Using up the SPRs does the job providing the SoH get reopened soon. The minute that happens there will be enormous relief and the price of oil will drop - anywhere between 10-15% they say. We know that will drag down EnQuest with it but it will be temporary. The SoH doesn't affect tax credits or growth in SEA but is ignored because of the larger threat. People just aren't looking at it and the mechanics of oil are far too complicated for most investors and politicians to understand.

ATM the world and his brother think that a resolution must happen so the riskier deal is to be long of oil and then get crushed when it collapses following a resolution of the SoH. If you go long you are basically taking on the G7. They [the G7] can only publicly state these aims BUT not their fears.

My prediction is a price drop when (and it is likely) a resolution of the SoH is announced but not in the 10-15% region and a fairly quick return to higher oil prices. People forget that Japan basically went to war in WW2 because they needed oil and another number that got me interested is that in WW2 Germany went to war with a population of c.80m. Iran has a population of 92m and was once an Empire. It has natural resources and engineering and scientific skills that means they are no walkover. A totally different proposition to Iraq.

Https://www.youtube.com/watch?v=IyVUgJ_5H5k

I used to follow Art Berman and was surprised when another investor mentioned him in a positive way. I stopped following him over a year ago because he had (imo) gone green and was talking a lot of rubbish. The video above is amazing. He has dropped the environmental angle and is using his in-depth knowledge and experience of the oil business.

He explains it in simple terms and agrees with Jeff Currie and Eric Nuttall among others. We are reaching a milestone that will dwarf all other events in my lifetime. We have got used to the Central banks and the IMF sorting out financial crises and imagine they are all solvable. Otherwise, why is the July Brent future $93.71?

My theory is that it is the empty (so far) rhetoric coming from Trump backed up by other countries agreeing to pump their SPR’s into the system. It is in all countries interest where possible to keep oil available and avoid excessive price hikes. They’ve survived crises before and expect a repeat. Reserves run out and must be rebuilt. That could be years away.

They may be right, but their timeline is completely wrong and that is using an assumption that an agreement of some description is next week. Maybe Trump playing golf this weekend is meant to calm the markets – he’s relaxed. But that is what leaders do in a crisis. The alternative is that his mental state is worse than imagined and he still thinks he’s in control. Frightening.

You missed this bit Auson - "Scottish Conservative leader Russell Findlay said: “John Swinney is fooling no-one with his desperate and dishonest nonsense. This is classic SNP grievance politics.

“Voters know that the SNP, just like Labour, oppose new drilling in the North Sea.

“The SNP demanded a windfall tax, Labour have extended it."

However, despite their weasel words the SNP does occasionally listen to the voters. Starmer is famous for his procrastination and Micawber optimism that "something will turn up". He's got Ed telling him that renewables will save him and it is only a matter of time. We're up sh*t creek but our glorious leader thinks he still has a paddle. That is what Ed is telling him.

Agree M - there is another narrative but if we use it we get accused of being too attached to O&G (especially EnQuest) and trapped in a time-warp where O&G was once important with little competition from other sources of energy. There is some truth in that but countries with a lower proportion of fossil fuels are usually blessed with natural resources that are hard to replace. You live in Belgium where I guess hydro doesn't contribute a lot. Nuclear has a lot going for it and suffered from being too expensive and attacks from environmental activists in the past. If solar was so good then why are very sunny countries trailing economically. Along with wind it suffers from intermittency whilst darkness and cloud cover limit its usefulness. It is weak in winter when it is most needed in higher climes.

All this is boringly repetitive and we are tired of it as is the public. It only concerns electricity which is a much smaller proportion of a countries energy requirements. If you notice they have dropped "renewables" for "clean, home-grown energy". Well, I don't know how you grow wind or sun and the "clean" does not include the manufacture of panels, turbines, cement bases or transport costs from China etc..

My biggest gripe though is the deception being played on the UK public by Labour. They pretend that all is hunky-dory and importing Russian oil via India is temporary. It is if they're lucky and Trump wins the war that he started and achieves peace under his terms. The US couldn't defeat Afghanistan so an invasion of Iran is never going to happen. The threat to bomb Iran back to the stone-age is empty. If you're not that far above subsistence level due to sanctions then you are hardened already and aren't that far from it anyway. In the UK it is much tougher and further to fall. It could affect the availability of Wagu beef in Waitrose or truffle flavoured sauces. We have learned to live with reduced supplies of saffron and caviar from Iran but giving up the weekend break to Prague or a drive to the seaside is enough to collapse a government. I'd say that Miliband is toast now. He's hanging on but he is only a black-out away from ignominy. How will electricity produce fertilizer and life-saving medical devices for example?

The Western world is clinging on and hoping for a swift resolution. The UK is something of an outlier because we decided not to use our own O&G and instead lead the world by being the first major economy to reach Net Zero (we can't be the first because Bhutan has already beaten us to it with assistance from the Himalayas). I don't think that will be enough to save this government if the Strait remains basically closed until September. Iran knows this too.

As nobody answered a question of mine I went to ChatGPT:

I see the point you're making now. You're not asking for a generic interpretation of an AGM attendance list. You're looking at it through the lens of someone who has attended these meetings for a decade and knows who normally turns up.

From that perspective, a few things stand out.

First, the Human Resources Director. For a purely procedural AGM with low attendance, HR is not usually the first executive one would expect to see. HR directors often attend when there are significant organizational matters underway—succession planning, recruitment of key personnel, retention issues, restructuring, overseas staffing requirements, or executive compensation discussions. That doesn't prove anything, but it does make the attendance more interesting than if it had just been the Chairman, CEO, CFO and Company Secretary.

Second, the Legal and Commercial Director. The legal explanation alone doesn't fully convince me either. Holding the AGM at Ashurst's offices means there is already plenty of legal support available if needed. However, a Legal and Commercial Director's role is much broader than legal compliance. Commercial negotiations, asset transactions, FPSO redeployments, joint ventures, host-government discussions, and development agreements all tend to flow through that office. If there are strategic transactions in progress, having that executive present is unsurprising.

Third, the CFO absence. You're entitled to be skeptical, but I would separate two questions:

Was the illness explanation genuine?

Even if genuine, was the CFO's absence convenient?

Without evidence, it's impossible to know. But experienced AGM attendees often place considerable weight on who is in the room because management teams tend to be creatures of habit. When the pattern changes, investors notice.

--------------------

As a mark of respect to the investors it would have been appreciated if Jonathan Copus had attended via Zoom or suchlike. I'm suspicious regarding his absence. I think we could be close to an announcement. The mention of Paul Massie's role is telling for me - "Commercial negotiations, asset transactions, FPSO redeployments, joint ventures, host-government discussions, and development agreements all tend to flow through that office. If there are strategic transactions in progress, having that executive present is unsurprising."

If he [PM] was there purely for decorative purposes why didn't he get the train back to Aberdeen with Craig? And why was HR not getting the train either?

We are in a position that was predictable. Think about it. The one commonality among governments is to feed and protect their country. There is not one country that can publicly support Iran’s blockage of the Strait of Hormuz.

So, Mr Market is saying we’re back to normal in a few months. I disagree.

I think Iran will stretch this out much longer. They know that once they open the Strait a lot of their advantage goes. They have paid a lot to reach this position, and I do not see immediate capitulation. North Korea would rather have millions starve than concede its nuclear weapons and like Iran, rules with an iron fist.

Common sense usually prevails and in other crises countries stave off the immediate threat and quietly go about the new world order. Why would Trump threaten Oman?

The US is still immensely powerful but always acts in its own self-interest. There are alternative source of energy and they’re not “Renewables”. Yes, they play their part but even countries blessed with natural resources (esp. hydro) and more nuclear still have an important reliance on fossil fuels. Solar and wind suffer from intermittency whilst capital, and grid costs are ignored. They are NOT cheap. But you’d rather have them (and blackouts) than nothing at all.

We are presently seeing the G7 work to an accord. That is what the market likes. I suggest that it will be temporary. We already see that a drone can scare an aircraft carrier. Mountainous countries can fire an RPG from a cave and hold off much more powerful armies.

There are E7 countries that are not as an accepted group or as powerful as the G7. A UAE minister recently described them as: India, Turkey, Brazil, Mexico, S, Korea, S. Africa and Egypt.

The Classic E7 are India, Turkey, Brazil, Mexico, Russia, China and Indonesia. To an extent Russia and China cancel themselves out and it also reinforces AB’s decision to build up our interests in SEA because of Indonesia.

The UK is under threat in an energy sense because of the reliance on the Arabian Gulf. EnQuest is not. This is painful but it isn’t going to end in the next few weeks. We are getting temporary relief from SPR’s. Iran knows this too. I doubt it is accidental that the US attacked in the summer months either. When the Chinese general was losing thousands to Gatling guns against their arrows the commander continued attacking because “they’re running out of bullets”. The Iranian generals know “they’re running out of barrels”.

For

https://www.youtube.com/watch?v=IvHJSRiSp_E

Against

https://www.youtube.com/watch?v=5vAXXMT4cko

I watched both these videos by two commentators I follow and trust. I am not a subscriber so only get teasers from Doomberg who clearly knows what he is doing and has grasped the social media/substack approach that is more than a newsletter and prices accordingly. It is competing with institutional research, energy consultants, macro strategists, sell-side analysis, and conference intelligence networks. This is a world that older investors struggle with. I didn’t enjoy the Doomberg conclusions, but he has been proven more right than wrong with O&G. In fact, recently he has been more right than Currie who has been bullish for O&G since I’ve followed him over the past few years.

Something VoR posted has been niggling me. He said there has been a big seller on the screens. I think he has misread this. I’ll explain. In FX you can guarantee that the Central Banks will coordinate and fight like attack dogs if a currency is heavily speculated against. The same for O&G but only on one side. The world’s governments want energy prices LOWER. Why is there no corresponding bid on the electronic price? Probably because Trump would hit it first then tweet something. The higher offer is far, far safer. We’ve seen the efforts and levers that governments have (mainly SPR) and they can flatten any surge upwards so there is far less risk on this side – UNTIL there isn’t. When I worked in FX the Bank of England would often deal via proxies or sometimes come in in their own name. People get to know who the proxies were and you must have very deep pockets and big cojones to take on Central banks.

Listen to Doomberg at 34:00 about the truth trickling out.

BTW – I am FOR Jeff Currie. VoR - I can't see the screens you can but there is ALWAYS a price for size. Be interesting if you can delve or ask some idea of the amounts? Then there are the brokers who can handle size and choose when to release info or keep quiet. Bit like politics really.

*Build it and they will come

My conclusion is that we are running smoothly and progressing. AB was looking fresher and far more invigorated than last year. AB stressed the awards and prestige we have in SEA. There wasn’t that much said about DESNZ and Labour. In time it will be resolved and, in the meantime, we have SEA. He did emphasise the tax credits value and that makes us very competitive in hoovering up the remaining fields in the NS.

We then departed for some libations at a local hostelry where Sam, Steve and John the Jock thought it amusing to get an o.a.p. drunk.

*might be just me but I didn’t accept that Jonathan Copus’s absence was due to a mild illness – he may have been upstairs?