Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
Hi TWalbyoff - the numbers comment refers to my limited understanding of accounts (I still don't fully get decomm and investment allowance) but threw in the other comments because it gives perspective. Some weeks ago we were getting excited about M&A so these excellent figures won't do us any harm if negotiations are continuing. I'd hate for us to be looking for partners out of desperation although the cliff edge for the basin is still there.
Not sure what to make of this in the RNS - "Leadership team and Board refreshed – focused on the exciting next phase of EnQuest’s journey." Why refresh when they've done so well and the replacements do look like they've come off the subs bench?
You don't want my comments on numbers although I do like the 2024 guidance and 2023 wasn't bad. We are handling natural declines better that Spirit (Centrica RNS today) "Total volumes from the retained Spirit Energy assets were down 15%, with lower production across the portfolio in line with expected natural decline rates. "
and Ithaca threw this into there trading update today "- Reflects a reduction in planned activity in the year as a direct result of the Energy Profits Levy"
What you're both missing is the collusion of the Tory Party in this. Labour haven't won yet but the economic conditions are hardly much better under the Tories. The cliff edge is there whoever is in power. March CfD auction preliminaries begin and could bring this to a head. You are not comparing like-with-likw when you use Norway to support your argument as the article Modestus linked to says.
Save this https://www.electoralcommission.org.uk/voting-and-elections/campaigning-election/online-campaigning/claims-made-online-political-ads
If you find anything interesting and it is purely propaganda not backed by facts then post here and inform the authorities.
We'll probably be contacting these people https://uksa.statisticsauthority.gov.uk/contact-us/
The media, political parties, lobbyists and advertisers are going to be up to all sort of games in the coming months. I don't know where they'll act but there is an easy way to find out by contacting them with cases.
Headline - Tory Donor guilty of price gouging
Labour have exposed another example of Tory profiteering. Ernie (a Tory supporter) was caught selling a dozen red roses from his flower stall in Kensington at £75 a bunch yesterday and again today. Under Labour and starting tomorrow we will be selling the same roses at £10 a bunch. Fully 7.50 times cheaper than Tory roses.
All our roses are organic and grown in natural b*llsh*t
Hi Andre - thanks for that but I'm not sure it helps. There is (I believe) also the FTSE small cap market. I cannot see either why being added to an index is a positive when we are touching an all time low. Maybe all the MSCI is that we've moved down from one index to the MSCI micro cap? I'm guessing here but I imagine the MSCI micro cap requirements are lower than their small cap.
I'm open to being educated.
Hi KO - Natural gas is at a 10 year low. We know its connection to electricity prices for when the sun don't shine and the wind don't blow. With the leads and lags this eventually filters into lower prices, certainly before the election. The growth of wind generation has continued increasing, so as it is many times cheaper than gas (according to Labour) we will have much cheaper electricity after all, Labour made a statement about its multiple times cheaper than gas.
The crisis in prices of mid 2022 impacted our bills between March and June 2023 but the price crisis in gas had abated by the beginning of 2023 so I think we can say we are back to the pre Ukraine invasion level but without Russian gas which we never really had anyway. With all the promises of renewables we can expect cheaper electricity and as gas is affected by world prices; cheaper gas too.
In February 2022 my electricity was 19.867 kWh and gas 3.862 kWh
My bill for 1st January 2024 had
electricity 26.60 kWh and gas 6.46 kWh
That means my electricity is now 33% higher than 2 years ago and my gas is 67% higher.
More worrying is that the first rise for 6 months appeared in my 19 Jan 2024 statement. electricity kWh 27.82 + 4.5% and gas kWh 6.96 +7.7%
Of course we've had inflation and supply chain problems but the public only want one thing. Cheap energy which they were promised. There will be a battleground around the next CfD auction (AR6) which starts preliminaries in March. The public are unaware of the subsidies renewables receive. Without them they fail. The Labour maagical money tree needs to be exposed.
The latest wobble with Labour regarding the Rochdale candidate Azhar Ali has me concerned. It might save Ed Miliband's career in Energy and let him carry on with his climate crusade. My reasoning is that any attempt to remove him from the post might be interpreted as anti-semitism.
The truth is that he deserves to go for his incompetence, lies and manipulation of facts. It has nothing to do with his religion. However, it is a card that can be played if they tried to sack or remove him from the post. We know how single-minded and ambitious Keir Starmer is on being our glorious leader and he'll stop at nothing to achieve it. I think we're stuck with Ed. Not because he's the man for the job but that Labour and Keir can't risk removing him.
Regards this Petrofac Bond https://www.ft.com/content/5a76f345-5e28-4f72-9246-6569c4ffe3d9
I don't know about any others but there is a YTM of nearly 50% here. That signifies a company in trouble but EnQuest reached 12 I think on the old retail bond and the HYN wouldn't have been far away either. All are healthy now and around 95ish. Before anybody says 95 isn't healthy I'd just like to say that AB doesn't control international interest rates. We're pretty secure here I think.
Hi M - I loosely follow PFC because AB once worked there and EnQuest was once part of PFC. The bribery scandal that befell PFC did worry me for a while because you don't know who might be drawn in. We've moved on from that and following your post I just read the last few chats on PFC. At 12:47 a poster says it appears that PFC will be deleted from the small cap index at the end of the month. We also had KO mention the same for EnQuest at 11:19.
I don't follow this index and finding the information on who is entering and exiting hasn't been simple and I've failed. Any guides appreciated and assuming KO is right then this helps explain the sudden drop yesterday. In fact it was a double whammy (+OEUK news release) and we were resilient which makes me more confident that this really is the bottom.
Some funds may well have in their mandates that they have to SELL when companies exit or are not allowed to BUY until they are in an index. Pointless commenting really. Sometimes it works and sometimes it doesn't but it will affect our shareholding list.
Regards the shorts - hedge funds hunt in packs and the amount isn't that huge for hedge funds even if they get it right. They don't always get it right and my two biggest wins have been in stocks that were heavily shorted.
Unlikely but I wonder if there is any future JV between EnQuest, Petrofac and Veri? I'm sure there is a lot of talent still at PFC and contacts and infrastructure dosn't disappear overnight.
Https://oeuk.org.uk/labours-new-windfall-tax-plan-sparks-job-loss-warning/
I'll repeat the final sentence. "This announcement was made without engagement with the industry."
Nuff' said. Looks like the industry is playing hardball back. It is generally not advisable to take on the government (or the next government). If you cannot trust the negotiator or the negotiator is acting in bad faith then your options are limited. It is actually a step forward that the O&G industry is taking the fight public.
Https://podfollow.com/evol/view
it sounds like these guys know what they're talking about. Keir Starmer is accused of duplicity and ignorance following his visit to Aberdeen 3 months ago (as mentioned by Dumbly). Not a good combination. KS has actually chosen a path the complete opposite of what the industry said is needed. Betrayal and the sound of investors running for the hills is the result. "Wilfully ignorant in favour of a populist policy" pretty accurate description of Starmer I'd say.
Thanks L7 - I didn't completely embarrass myself then (wouldn't be the first time). Many new businesses struggle to get traction (indeed Tesla was one) and we are c.14 years old. I read that companies have a corporate life of about 15 years so we're due a big change. We are fairly unique on the survival front and did better than Premier shareholders. I can't disagree with your Kraken not being profitable as I certainly haven't seen any profit. If we survive this change of government and the UKCS has a future in hydrocarbons, especially oil, then it will mean that common sense has returned and "energy security" becomes more than just a slogan. The costs of renewables are underestimated by multiples and are squared up by a quasi religious belief that physics and science will revolutionise real world technology. That in turn meaning we'll have an EROI that is acceptable and affordable. I don't see that happening before 2050 and 2030 is just laughable.
I think EnQuest has a value. Much higher than we're seeing but its future does not lie in the hand of its management. The price is what it is and there is little in it allowing for a friendlier government or tax treatment. I'm a natural optimist which is why I'm here. Doesn't mean I'm right.
The former Labour councillor, who quit the party last year in anger at its energy strategy, said raising the levy would spell “economic gloom” for the north-east.
“If you’re going to have the investment that’s required then you’re going to have to work with these companies and not work to destroy them which is basically Labour’s perspective at the moment.
“They’re trying to destroy the oil and gas industry at a time when they need it to be a partner in energy transformation. That will be catastrophic for this area.”
Well, he sees it the same way as me. I cancelled my Labour membership for the same reason. You only get a limited number of reasons for leaving and none were for "crackpot energy plans".
This is the full list for leaving, you can only choose one:
Financial reasons
Other personal reasons
Policy
Current party leadership
I'm not seeing enough benefits from my membership
Would rather not say
I'd say I'm middle of the road politically. Labour will lose more people like me who are put off by extremists on both sides. I can't forgive the Tories for EPL and Labour are pandering to the eco-zealots. Both are unprepared for the inevitable subsidies required as their strategies on energy fail.
Hi L7 - I can't find or remember the link but I read that it is common practise in accountancy to allow depreciation and decommissioning to be allowed over a number of years. However, in an earlier attack on oil companies they changed this so that through financial chicanery the rebates/refunds/credits whatever you want to call them were cancelled out and speeded up so the Internal Revenue received most of the money up front. It meant that when fields were decommissioned the cost was offset against profits then to balance it out. It made sense to me because expediency is also another method politicians employ - it is usually better known as an investment allowance. Not sure this helps but throwing it anyway. I'm probably completely wrong.
You may remember that I was trying to get a breakdown on 10 homes retrofitted in my Borough, Enfield. It is still continuing and I have hit an impasse. They think I'll go away. They think wrong.
I expect at some stage we will have some detail from Labour just how much they're going to pump into insulating millions of homes. I just hope that Enfield aren't part of the scheme. The 10 retrofitted here cost £127k each. Being fair-minded I rounded it to £100k per property. I realise many properties won't need anywhere near that amount but the 10 homes retrofitted looked awfully like the council house I was raised in. Anyway, at £100k you could retrofit 10,000 similar homes for just 1 billion pounds. It will have no problem attracting private sector involvement at those prices. Problem is it won't leave much for hydrogen development, battery farms, tidal, wind subsidies (CfD's going up) and kite flying.
Today from FT. Interview with Patrick Pouyanne CEO of TotalEnergies. Some picks.
However, Pouyanné was also adamant that he was not investing in wind and solar projects just to reduce the company’s emissions. Unlike some in the oil and gas industry, he sees power as an increasingly profitable opportunity, particularly as he expects the energy transition to result in permanently elevated electricity prices.
“I know that there is a theory which says renewables are cheaper, so it will be a lower price,” he said. “We don’t think so because a system where you [have] more renewable intermittency is less efficient . . . so we think it’s an interesting field to invest in.”
“I don’t need Ørsted. What do they bring to me?” he said, referring to the world’s largest offshore wind developer whose share price has fallen more than 70 per cent since peaking in 2021 at the height of investor frenzy over environmentally friendly stocks. “This question could have been asked three years ago, but we have developed our own portfolio.”
The company plans to increase oil and gas output by a combined 2 to 3 per cent a year until 2030, a strategy that has alienated some investors but won over others. The number of US-based shareholders in the company has increased from less than 40 per cent to 47 per cent over the past two years, Pouyanné said.
BP, in contrast, has committed to cut oil and gas production by 25 per cent by 2030, compared with 2019 levels, although that is down from a previous target of 40 per cent after it pared back the ambition last year.
Vive la France