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From Energy Voice today - DESNZ headless rush to deindustrialise and a complicit government are to blame. They've lost the Unions, Scottish support and it seems ideology trumps common sense. Surely they must perform another "U" turn. The pressure is certainly there and I wouldn't say no to cheaper energy bills!

"NEO’s North Sea windfall tax burden

Across 2024, NEO reported payments of $454.5m in UK oil and gas taxes, a sharp increase from $272.4m the year prior.

This came despite NEO booking an accounting tax charge of just $3.5m in its profit and loss statement.

NEO said the gap reflected the timing of payments under the UK government’s energy profits levy (EPL) and other North Sea fiscal regimes.

The operator also warned that the March 2025 extension of the EPL would have added a further $378.6m to its deferred-tax liabilities had it been in force at year-end.

At 31 December 2024, NEO’s total deferred-tax liability stood at $1.18 billion, driven mainly by accelerated capital allowances on its North Sea assets.

The accounts underline how the levy, first introduced in 2022 and now extended until 2029, continues to weigh on investment and balance-sheet planning for UK producers."

For balance I watched this https://www.youtube.com/watch?v=OFF1imh1U2c

Michael Liebreich is one of the cleverest and well connected members in the opposite team. He is not your usual rabid ideolog or climate activist. He knows his stuff and is very persuasive but unlike Ed Miliband knows when to give ground; albeit temporarily. The first half is very interesting as he backtracks on what the Climate activists have achieved until now. He doesn't concede defeat but is scathing about the COP meetings (40:00) and says ESG is over (51:50).

It is a tactical retreat and he reaches a lot of people and companies. Plus he is backed by Bloomberg money. The interest for me is that for him and his organisation to retain clients and credibility he has to face the real world. I wouldn't be at all surprised to see organisations like Uplift reduce staff numbers as donations dry up. He admits that the zealotry went too far. His contempt for Hydrogen is also worth watching. I wonder how the H100 Fife Hydrogen Village is doing at £100k per home?

The GWPF were at the Tory Conference and ran a panel excellently chaired by Harry Wilkinson. I thought it would be a rehash of stuff I'd already seen but watched the video anyway. It was outstandingly excellent with a fresh look and stuff I didn't know. QA was also exceptional and I doubt the audience were as biased as in the BBC QT.

KP started off stutteringly but improved throughout. Andy Mayer landed a killer blow at the end with an attack on the CBI whilst Lord Offord pointed out that he was "selected" not "elected" and avoids politics (51.75). I'd vote Tory if there were more like him. KP ended on mitigation with contracts and I forecast that AR7 on offshore wind won't happen. She said something earlier which I think is very important "I think oil is too important to burn" - I know she hints at a medical issue some time ago and pointed out that hospitals could not provide a service or drugs without oil. There is so much good stuff from this panel you are missing out if you don't watch it. Please pass it on to your contacts.

https://thinktent.co.uk/can-britain-survive-ed-miliband/?mc_cid=ae45d698be&mc_eid=35cf3821be

Ukraine will never kneel / unless in prayer - Dymytro Kremin, Ukranian poet

Excellent Oct23, Greta will have to reinvent herself a third time. And she'll succeed. These people live for crusades that are ideological and quasi religious at their roots. I don't know what will replace it but they are like London buses. I love it when the protestors (and I take no side in Israel/Palestine as it has been going on since recorded time) say they are peaceful and they repose saint like in their certainty and superiority as they are GENTLY carried away. They are the same people who supported juststopoil. Our police treat them like they would a child or a geriatric invalid. Try doing the same in China or Malaysia. Sunak brought in the EPL.

Whilst here this from the Daily Telegraph today. A piece largely about Boris backtracking on Net Zero and saying it was a mistake to set such targets.

"The economic costs of this deindustrialisation, while acute and visible in many towns and cities, has been cushioned by the replacement of industry with services at minimal energy cost.

This is now changing, as it is widely expected that the service sector will become increasingly industrialised and energy-intensive.

This trend can be seen most clearly by the proliferation of data centres. According to the International Energy Agency, they now account for 10 per cent of electricity consumption in five US states. In Ireland, the figure is over 20 per cent.

If, as the Prime Minister says, Britain is to become an AI superpower, we are going to need much cheaper electricity.

But policy is working in the opposite direction. The arbitrary dash to decarbonise the entire grid by 2030 – which even the Climate Change Committee says is necessary to hit net zero by 2050 – is locking in prices for 20 years at a time when capital costs are at record highs.

The result is that the country which already has the highest industrial energy costs in the world will see those costs rise further still.

This aggressive pursuit of net zero is currently not only economically destructive, but an active danger to efforts to tackle climate change. People are not going to tolerate interminable price rises, especially when politicians have promised the exact opposite."

OPINION

This paper's advice to Ed Miliband, whom we hate

It is only to be welcomed that Energy Secretary Ed Miliband is softening his stance on drilling for North Sea oil and gas and it would be wrong of us to suggest that he is a useless idiot whose nutty green zealotry will kill us all.

Net Zero is of course a desirable end, but the timeline proposed - i.e., soon enough to prevent catastrophic warming - is both unrealistic and naïve.

A more gradual advance to net zero is required - say, over the next million years, by which point some new fossil fuel will have formed and we can then enthusiastically extract them. In the meantime, of course we must focus on sustainable sources of energy, but only after every drop of oil has been burned.

Perhaps the loony Mr Milibonkers should remember the old saying, "when you're in a hole, keep drilling".

As reported in the current issue of PRIVATE EYE

Listening to Money Box on R4 about pensions today. Interesting comment about environmentally friendly investing which basically torpedoed oil & gas in the UK. It was popular for a while but the returns haven't been impressive despite the hype. What I hadn't considered and was brought up that companies not running these type of funds were also forced to steer clear of O&G as when building the investment case they had to take in the consideration that at the time NZ by 2030 seemed very likely and popular the UK O&G companies would possibly not survive. They had to allow for a continuance and increase in the damage being wreaked on the industry. All companies were affected but obviously depending on your exposure to UK production it was an even bigger threat. So the impact was basically to drive funds away from the sector and those companies with high exposure to UK production were the worst hit. Step forward EnQuest.

it was followed with an announcement that the Net Zero Banking Alliance (founded 2021 under the aegis of the UN and spearheaded by Mark Carney) had formally shut down yesterday as banks had pulled out and it was unviable. Its remaining members had called for it to stop being a member-based organisation (whatever that means?). It once had 140 members.

Private Eye had 2 articles dancing on the grave of renewables and promoting tie-backs.

All of the above is now filtering into the mainstream. It is now OK to question the economics and "science" surrounding NZ. It also means that companies in the sector, especially UK companies, that were oversold will now bounce back as finance frees up and funds can now buy again.

An error doesn't become a mistake until you refuse to correct it. -Orlando Aloysius Battista, chemist and author

I looked for the reference to $100 that Linda Cook was reported to have made about the suggested tax whether on revenue or profit following consultation with industry and that the industry has put forward a starting point above $100. I watched a talk she [LC] gave at a Barclays Energy event 2/4 September where she stated that the UK is the only country with a WFT on ALL profits but no $100. I then went to a video presentation of 1 Oct by Elizabeth Brooks their head of IR and she did mention the figure and that there isn't a lot of confidence they'll see a change before 2030. By my circuitous route I realised that all EB had done was "fluff out" what LC had said almost a month before. We complain about politicians and the 'party line' but oil companies do the same. The reason is clearly stock market rules and we should only take notice of official statements where everybody is warned in advance or at the same time and there is an accompanying RNS. So my plea to EnQuest is that when we watch the presentation on 14 October by Craig Baxter there is a fresh RNS hopefully giving us more up to date information. I'm not asking for information that could give us advantage or cannot be released because of NDAs, negotiations etc. but without one I'm wondering if it will be worth listening again to what AB has already said? Kinda sloppy seconds. No offence to Craig or EB because they do go a little deeper but the constraints are clear.

AB is more active and being regularly quoted. This is not accidental and he will have communication and PR advice behind him. We are clearly getting closer to something even if its only the budget.

Whilst googling I came across this https://www.youtube.com/shorts/Ly4hDeGC7Dc was a deal struck between LC and JC behind bars? I had a surreptitious look at JC's ankles at the AGM and I can confirm he wasn't wearing a tag.

Hi BondSan - I'll risk the wrath of Stevo. Bond holders don't actually want to 'dilute shareholders out of existence' because that means they have taken on extra risk and lost money. I doubt very much that we'll renew the bonds anyway because does anyone really believe we'll limp along in this malignant North Sea fiscal and regulatory hellhole for another 2 years or not do a deal? We have Linda Cook telling us that the WFT is ending because there is no windfall and the WFT cut off will be $100. Scheduled for 2030 but even I can play with the term "Levy" from the EPL. AI says"A UK minister introducing a levy will often stress it is not a tax, to highlight that it’s sector-specific and used for a particular purpose, even though in law both are compulsory state charges." So arguably does not really come under Rachel Reeves remit and comes under the purview of Ed Miliband and juststopoil. Plenty of wiggle room just there.

Premier oils bonds were 40c 6 months before Harbour put them out of their misery (ending rooftop barbecues and Friday afternoon champagne fuelled debauchery at Santinis [now closed]). EnQuest ain't like that.

An analogy - 2 property companies. One investing in decaying hotels and filling them with government subsidised homeless/refugees. Earning vast sums similar in some ways to Covid and PPE. FCF is sky high.

The other owns brown field sites and some decaying retail premises. They continue to buy more retail against a headwind of planning hurdles. Some are let to charity shops or short lets and others are boarded up. Profits are low and they struggle to survive. Who would you invest in?

Well Peter Palumbo made a fortune with No.2 and called it No. 1 Poultry. I think No.1 is at risk of a 'Levy'.

Sometimes you just have to look a little further and have faith in management.

I disagree Stevo. Agreed we have a cash flow problem with low oil but you could also describe EnQuest as "asset rich, cash poor". The NS is a declining basin although much is a speeded up decline by the obsession with Climate Change. We have a wealth of assets that are worth a lot more than our current share price in the right hands and with a friendlier fiscal and regulatory environment we are an ideal partner in many situations. I don't know why you're harping on about the bonds when they are showing no sign of stress. Plus I think we are adapting and slowing the transition because we were on a suicidal course as a country.

We announced that talks with Serica were ongoing following media rumours on the 7th March. I asked AI when rumours of Prax started and they had this "The first publicly reported rumours that Prax was in financial difficulty seem to date from mid-April 2025." That means those in the know would have known earlier than mid-April so there is a weak commonality timewise with both deals. We know from past deals that AB's parsimony with information is at Intelligence Agency levels and if I had to bet I'd say the leak came from Serica.

If AB had another deal on the hob this might have been an unwelcome approach and it meant distraction and they would have to go through the motions. Why would 2 companies with attractive dowries tax wise get into bed together. If down the road they wanted to be gobbled up by a major then that depends on the NS being a valuable basin when it is actually declining. Would a major even be interested? Prax could be a runner-up prize and we are looking at something else.

I'm coming around to thinking we might do something with Harbour's UK assets.

Extract from today's Today's Daily Telegraph. The first sentence is the most important. Has the man no pride? Did he help stack the chairs and sweep the hall too? Evidence of the veracity of that famous quote "All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs."

"Mr Miliband was given a slot speaking at the conference on Wednesday, when many party delegates had gone home following Sir Keir’s speech on Tuesday.

He has become a target of anger from union leaders representing energy workers. Sharon Graham, the Unite general secretary, told The Telegraph this week that Mr Miliband should be sacked.

Responding to Mrs Badenoch’s announcement, Mr Miliband said: “This desperate policy from Kemi Badenoch, if ever implemented, would be an economic disaster and a total betrayal of future generations.

“The Conservatives would now scrap a framework that businesses campaigned for in the first place and has ensured tens of billions of pounds of investment in homegrown British energy since it was passed by a Labour Government with Conservative support 17 years ago.”"

This is good news. We may see something from Labour to pre-empt the Tory Conference which starts Sunday. The Left love Miliband. That is all that is keeping him in office. The radical Left couldn't care less about Climate Change but are automatically against profit, progress and industry. The perception they have of the O&G industry is oppressive management gouging profits at the expense of workers and taking home "eye-watering profits". They only understand "public service" (otherwise known as 'benefits) and State ownership.

"Ed Miliband delivered a forceful address focused on energy, climate, fairness, and confronting what he described as right-wing threats. He framed the speech as part of a broader vision for change under Labour, contrasting it sharply with the agenda of Reform UK and wealthy external influences. Among the central themes:" AI

Basically he said FA. It looks like he's a spent force. The appearance of 2 of the biggest and most important Unions (GMB and Unite) sealed it for me. Unite have finally come into the open with Sharon Graham calling for him to go as he has 'failed'.

Here's a thought. Re the Linda Cook comments. She is a US citizen and can go back. AB is Palestinian and basically stateless. The UK is his home. Her comments do suggest she's given up on the UK but she may also be playing hard ball? She must HATE Labour after the mauling she got at the Environmental Audit in July 2022 and they weren't even in power then.

Must say I'm happier after the Conference than before. Ed is "hanging around like the Ghost of Christmas Past" and I have Zero sympathy. The Unions have been given the nod from government and they do have leverage. Unite said they would no longer accept decarbonisation by deindustrialisation. The Cabinet members were there in the main hall with a notable absence.

Dumbly asked about B&B. What Ed said does not exclude either of them from being developed imo. They are both handy cards to hold and Bentley has already produced from an EWT. Development will rely more on future economics which are challenging enough but I think they fall within the definition and also are close enough for tie-backs. Ed is clinging to NO exploration which isn't the same as testing existing fields that have been discovered.

Possibly irrelevant but c.2015 I spoke to another founder of EnQuest who said they'd looked at Bentley but chose Kraken. They know quite a bit about B&B.

Https://www.youtube.com/watch?v=PUZnypdaYD4&t=86s

For once a clear message from Unite https://www.linkedin.com/feed/update/urn:li:activity:7378885230545498112/

A chunk of the Cabinet were next to him. They cannot pretend they haven't been warned. Ed noted by his absence.

Fighting talk from Ed "lights out" Miliband the lightweight champion of the Cabinet in this short video clip: https://x.com/aDissentient

20h ago. Weasel words as expected. "There's no resiling at all from our manifesto position". I read it that existing fields will be developed.

He looks ill to me.

I had to search and it was only because the guy was unsuited and had GMB printed across his workman's jacket. He was the person who introduced Rachel Reeves speech at the Conference. His name is Matt Williams and he is a welder at Hinkley Point C and the GMB Rep for Nuclear Energy.

Nothing happens accidentally at these events and I imagine Gary Smith was happy for his guy to introduce RR.

Gary Smith is outspoken and from my perspective the only Union official who unashamedly supports O&G workers and the NS industry. And he's a Jock. It would be impossible imo for Ed Miliband to command such support from one of the more important TU's. Maybe I've spoken too soon and tomorrow Ed will top this and surprise us. I think we were given a massive signal. If there is division between RR and ED it can only help us. Perhaps it was setting the stage to bring in nuclear as an acceptable replacement for fossil fuels but I think it also muddies the waters and gives openings for O&G. The problem for Labour is that the lies and costs regarding renewables are now in the open and people can see beyond the hype. Nuclear isn't cheap with long lead times and regulations to overcome. There is also a shortage of CCGT plant with deliveries about 8 years away and even maintenance parts can take 18months.

Sharon Graham was also at her incoherent best screaming for Nationalisation of energy.

* as we all become more knowledgeable about electricity here's a tip when explaining costs to the average bill-payer who hasn't a clue. I pay British Gas 22.269p a KWh and 43.017p standing charge. Because of the Grid connections, supply lines etc. which only confuse people I converted the s/c into my average cost and adding them together and converting it to £250 per MWh. The benchmark for wholesale energy varies but is c.£75 MWh. Most of us don't use 1MWh a month and the Energy companies make it easier for us and make it look cheap at only 22p. Only then can you show how some of the CfD prices are way beyond what we pay for gas. The gas price we pay currently is £63.30 MWh + standing charges.

Enquest MC $286.48

Value by 2P $387.78

I used the $2.3/2P boe that Serica priced Prax assets at.

Shell announces Victory gas field starts today. Nothing to do with the Labour Conference - purely a coincidence. Staged?

Meanwhile the best we can do is whinge. I do so hope that AB has something up his sleeve. Incidentally the merger with Serica could be back on from November 2.

There is a presentation at 9 a.m. with Investor Meet Company. Prax looks cheap but what is under the bonnet? Big decomm someone suggested so that would mean talks with Enquest if only for a quote. This deal could force into the open what occurred with the aborted merger with Enquest.

We sure live in interesting times. I'll be listening/watching the presentation.

Talk of tax losses value etc... All a bit beyond me but plenty of crossover for EnQuest. Interesting question to IR might be "were we in the bidding and was this behind the merger/reverses take-over with Serica or whatever you want to call it collapse?"