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"Despite calls for more production, policymakers remain highly hostile toward the fossil fuel industry. In the United States, President Biden repeatedly floated the idea of a windfall profit tax that would severely impact E&P profitability. Every proposal by the Biden Administration in response to high energy prices is either outright antagonistic towards the industry or, at best neutral. They have suggested banning crude exports (bad for producers and refiners), reducing gasoline taxes (good for consumers, neutral for producers), implementing windfall profit taxes (bad for producers), banning drilling on federal lands (bad for producers), and increasing subsidies for renewable energy (bad for everyone).

At no point has the administration signaled to the energy industry that its stance might be moving from outright hostility to accommodation. In the first of two congressional hearings in the last 18 months, members of congress criticized the sector for not cutting production faster; in the second, the same members blamed the companies for underinvestment, low production, and high energy prices.

The situation in Canada and Europe is similar. Energy CEOs remain highly concerned that any increase in oil development will be met with outright hostility and increased government scrutiny. No CEO longs to be part of the next congressional hearings. Under these circumstances, it is entirely rational for oil companies to put off increasing drilling activity and development."
From Why Won't Energy Companies Drill? 07/ 12/ 2022 Goehring & Rozencwajg

There won't be any concessions from Hunt imo on EPL. Climate action is now a religion for most Western governments and you might as well argue with the wall. Events will decide whilst renewables will no longer have the subsidy crutch and will have to stand on their own feet. No problem there as Labour have been telling us they're up to 9X cheaper than fossil fuels.
I'm happy to wait for the real world to intervene whilst enjoying the protection of EnQuest's tax losses. We are very profitable for 2/3 years. The article BTW is worth reading and explains why dividends/buybacks are a no brainer when low valuations encourage companies to favour returning capital to shareholders over increasing drilling. The current fad of renewables is like a diet. Great in theory but ineffectual in practise. Let us see if the public will stick to the diet?

Nothing to report. "20 year plan to make UK the world's next silicon valley".
No real mention of energy and he spoke from Edingburgh live until 12.15. It was all about Financial reforms and has the (hopefully for them) the staged catchy title of "Edinburgh Reforms - the next Chapter".
Here's a sample. Have a sick bag close by:
"The UK is working to become the world’s first net-zero aligned financial centre, and today’s measures will further deliver on this ambition, including by committing to publish a new green finance strategy in early 2023, and to consult on bringing Environmental, Social and Governance (ESG) ratings providers into the City Watchdog’s regulatory perimeter, to ensure these products are transparent and use consistent standards. Achieving this ambition will see more investment in sustainable energy supplies such as nuclear, hydrogen and offshore wind – delivering new opportunities and well-paying jobs."

The public attendees didn't give the impression that they were stupid or accepting of the Labour version either. There comes a point when they will say; "OK, we've listened to you long enough and allowed you to experiment - now explain why we're falling behind the rest of the G7 in economic terms and have some of the highest energy prices in Europe when we could/should actually be closer to US prices for energy."

He is also attending an FT event called 'The Global Boardroom' timed for 11:50-12:15 today. He is giving a Keynote Interview. Probably a waste of time but I'll watch it if I remember.

I watched it last night and it is quite demoralising. The same arguments and misinformation from a revolving door of usual suspects. It would not have been much different if Labour had been in power and it is easy to attack, add to problems without giving solutions and pick on quite obvious intransigent positions. I'd imagine even Sweden, famed for its welfare system is not without problems with an ageing demographic and care issues.
Labour were asked what they would do to sort out our nursing/doctor shortage and the NHS. The Labour MP they had waffled away as usual blaming Tories etc. but after persistent questioning from the chair said that they'd go for non-doms. "There's £3bn there" she said. That wouldn't even touch the sides with our problems.
Of course they repeated that renewables are cheaper than fossil and Hydrogen is the future. They are almost always inept and unaware of the simple physics involved. A farmer asking about how they'd survive wasn't even responded to. Fertiliser is another victim in the religion that is climate action.
A glimmer of light is that the 'windfall tax' wasn't mentioned.
I doubt the EPL will realise the hoped for increased revenue. Why would you go for longer term investment when the next government looks like being Labour and they're even more hostile towards the O&G industry.

A start might be for government to explain that renewables are mainly for electricity generation and there are many processes and uses for gas and oil that the public are unaware of. Costs need to be explained to people and the mantra that renewables are cheaper exposed by pointing out that energy bills are exhorbitant NOW and require major subsidies, maybe forever. Now they've crucified the O&G industry can they promise CHEAPER energy in the future WITHOUT fossil fuels. The question should be aimed at both parties.

I just had a thought. Will there be any carbon to capture?

Well Xi is in Riyadh and getting a warm welcome from MBS. Looks like they expect oil to be around longer than our next election. Something to do with 'energy security' whatever that is?

An interesting point mrc. Was the intention of the EPL to hasten the end of the NS O&G industry and appease the environmental lobby? Because that is what it has done.

I do hope their numbers and those of the future Labour Government's still add up.

https://www.reuters.com/business/energy/north-sea-oil-producers-seek-price-floor-limit-uk-windfall-tax-2022-12-06/
The link is only to show the Woodmac graph of 'Britain's biggest oil and gas producers'.
We narrowly miss out but that wasn't the point. Two things are happening.
I've got a gas bill that is sky high so no doubt many people who were unprepared have assumed the government give aways were 'freebies' are now facing reality.
From the graph I can only see ONE US company, Apache. They're not mugs over there and US companies are much happier enjoying their domestic market where fossil fuels still have a role to play and taxes and regulations are softer; you might even say energy and business friendly. There may be some private equity from the US in the other names in the graph but the experience of EIG with Harbour is hardly encouraging.
To add insult to injury our government is crowing about deals done with the US for importing LNG. The cost and carbon increases in liquefying NG make it something like twice as expensive as using the stuff we have in abundance offshore (and onshore if you include fracking). It seems an expensive price to pay for US security and I'm not even sure they'd rush to our aid if needed. The economics seem just plain stupid to me. I think meeting Hunt tomorrow is pointless as the decision to abandon the NS seems pretty advanced to me.
Is it too late for grown ups and experienced business leaders to join in?

*I'd love to be there when Linda Cook speaks (assuming she's invited).

Hi AOK - even time is quite a modern invention. Our evolution is quite short in the scheme of things but we are programmed to react to outside forces (e.g. fight or flight) and run with the herd.
Some observations:
Trying to beat the market requires skills and in depth research. There are tools out there that make it easier than ever before but they also allowed Bitcoin to prosper.
Spread betting firms are no different to bookmakers. They make the spread and are the equivalent of the 'house' in a casino. TThe 'paper' market in oil dwarfs the physical.
Oil is cheaper presently. That is a result of stockbuilding (imo) and that runs down as conditions deteriorate and events pan out. Russia front running the Cap probably had a part too. I often take the contra view when this happens. It means you know where the herd is grazing.
The biggie imo is that the pariah status in the West of O&G means that capital is harder to get for new fields and even if it was there is little encouragement from government to develop. That allied to natural declines means that supply is severely constrained. You don't have to be a genius to arrive at these conclusions. You can probably add a few other items and of course there are those who will dispute what I believe.
Countries can go down the wrong path but it doesn't mean being of the opposite view is a winner. I opposed Brexit but we are stuck with the damage it caused and will continue to wring.

*I'm still trying to understand why Gareth Penny accepted the role of Chairman. He is not the safe pair of experienced (and acquiescent) hands that are usually chosen. I think our route to fresh capital could be easier if required.

"Every day, we are exposed to a barrage of noisy information, making the forces and changes that matter harder to see. 'Salient' does not necessarily mean 'important'. Sometimes, major news events do affect the long term - wars, pandemics, elections. However, so much else of the daily churn is ephemeral, and even unhelpful, for understanding how the world truly works. It's the information equivalent of junk food."

"The long view reveals that the future is only singular when it becomes the present; until that day, it is always plural."

Quotes from 'The Long View' by Richard Fisher

I would put it less eloquently and say that spending too much time reading message boards is likely to skew your perception but it will help you keep up with the herd who see the oil price around today's level.

Khatilja Haque of Emirates NBD expect Brent to average $105 for 2023 - today Bloomberg.
https://www.bloomberg.com/news/videos/2022-12-07/haque-gcc-region-not-immune-from-global-slowdown-video

*I will accept that she is talking the Emirates book but I still think she knows more than our trolls.

Nothing weird in your 1st para. Dogstar. The official Moody's rating is 'Not prime - Highly speculative'. The bet is if you strongly agree or disagree. If a seller you think 'substantial risks or extremely speculative'. I don't trade for 2 reasons. I am often out and about and hate being tied to a phone for updates. Secondly, I have no advantages and am basically a punter taking the price or spread. If I worked in (say) a hotel I would have a better understanding of the Hotel trade and might consider them. Having said that , Costco was a big winner for me and that was because I shop there. I read on one spread better site that 73% of retail investors accounts lose money. That would also include traders that work in banks and funds for private use so the actual figure could easily be higher for a genuine retail investor. I've worked in trading rooms and most enjoy a gamble with many having accounts.
I am intrigued by O&G but have never worked in the industry. My view is long term because I've seen only promises and the sheer density and physical advantage of fossil fuels are immense. I have worked in the domestic energy saving environment. People are more concerned about cost than the environment. Government know this. The EPL came as a surprise because I never imagined the UK Govt would so quickly destroy an industry. We are now in the position of buying LNG from the US who don't have such a draconian regime either in extraction or taxation. The carbon footprint is probably bigger this way but we can be poorer but prouder that we can blame someone else for emissions.
I don't know how far back your interest goes in EnQuest but some LTH's have increased with RI and Placings oddly enough around this level. They also have picked up stock in single digits and have bond holdings so it is different approach but I'll concede it isn't accepted orthodoxy.
Basically there is no method that wins all the time. Like you I guess we'll both miss the break out if there is one.

Be Lucky

Jeffrey there is an enormous amount of manipulation and double bluff at the country level and further down we are at the mercy of the UK Government (EPL for instance). Countries trump companies. Much of the discussion here is just venting or idling away some spare time but occasionally you pick up something you might have missed or affects your decisions. There is also contact away from the message board. The only people I can vouch for as holders are attendees at the AGM but that doesn't mean they'll be shareholders come the next one. After a while you get to trust certain posters and value their take on the market and EnQuest. I don't look for or expect perfection. Rather pointless taking it to heart - a bit like a drowning sailor cursing the sea.
The near future is very promising for EnQuest with the shelter of tax credits and the new chairman is very interesting. If their is a dearth of capital for the industry then access to private Lombard lending becomes even more crucial if expansion is chosen. I imagine Gareth Penny knows where to go when the market heats up or turns more favourable. It isn't just why EnQuest chose GP chose us; why did he accept the role?

*There are several prominent trolls and stalkers attached to this board but that is common on every message board. That is modern life and the internet.

Stop it Dogstar. You keep adding complications. Now I have to consider what risk EnQuest is.
I have them as Low Risk obviously but Moody's and the market would probably disagree. We'll probably have an EPS equal to the share price this year and again next year. There are some crazy ratios and projections around. I'm betting on people wanting to keep warm and move around in the future.
Agree with reading everything. Problem is everybody else reads the Sun or twitter and I can only take a few minutes of 'shouty' Bloomberg.

I'd sell oil. Plenty of ways to do that which don't require shipping or insurance. Do it through derivattives, futures and options. You wouldn't even have to sell much in this febrile market with your sophisticated media outlets giving a backing narrative that is plausible. It would go down well in Russia too, outwitting the West (alongside a chant similar to Millwall's "no one likes us, we don't care"). I doubt those requiring physical oil pay much attention to what Bloomberg experts are saying anyway. Cheap is cheap. I've never doubted oil would be cheap at this end. We still have the rest of winter to get through. As a child we used to stock up with coal. That has changed now with renewables solving all situations - or perhaps not?

Sounds like you've just described bitcoin Dogstar with the "trend is your friend" quote. I missed out there too.
As for O&G I'm with Warren Buffet in believing that there is value in oil stocks (OXY). He is of course a self-admitted failure at day trading. I will accept that TA tells you what the manual says but presently I'm more concerned with the import of our new Chairman. Does the training course cover strategic planning?
I do agree with you that following daily movements is usually a waste of time.

BTW Taleb argued that all these systems are flawed in valuing derivatives and as they now affect overall markets (bots, algos call 'em what you like). He even went as far as to say that Myron Schole didn't deserve the Nobel prize for his black box contribution. As I'm not clever enough to understand them anyway I rely on common sense and experience over the longer term. Presently I'm not doing well (small profit) but investing can be long term too.

His contact list is phenomenal. The shake-up in energy will create as many opportunities as disasters. He could probably write a book about the characters he has met. Whatever your plans are a base and investor involvement is always required . This is someone with immense experience in extractive industries and seriously rich individuals.
It won't happen overnight but I expect a very interesting New Year. I doubt there is much that would faze or surprise him. What a team they could be!

This is a serious guy. I doubt he needs the stipend and it will set tongues wagging. It hints at ambition. I was beginning to get worried about the delay. Most here don't worry about governance. I do. I like to see people who value their reputation.
This augurs well for the coming years.

Not a typo onedb - but then I don't worry about decimal point accuracy. I traded forward currencies for 27 years and stopped my obsession with points when I left. We've been in contango briefly and are bouncing along. Look further at my post and I suggest a pivotal point. My views remain unchanged.
I don't follow charts either. I'm a dinosaur compared to you but I've seen stuff and still speak to people.

Er no. Russian Cap which pi**es Russia off who see it as a variation of EPL; OPEC leave output unchanged so they're not worried by oversupply at present; China relaxing Covid rules so demand improvement expected. Recession fears still there but abated a little and Brent at $87. Contango or thereabouts. What's not to like?

Looked at EnQuest volume on London Stock Exchange 300k traded so far today. Risible.

Are we at a pivotal moment or are we adjusting to our new role as a football super power?