Member Info for Soder

Some analyst have updated their models for the tax and have put out revised or reaffirmed price targets this morning.

Morgan Stanley. Buy. 590p
Jefferies. Buy. 680p.
Stifel. Buy. 670p.

They chase run the numbers. They know this is imoact is **** all.

So will everyone please reach down into their trousers and make sure they balls are still there buy the **** out of this. It’s a feee option to take money out of someone else’s pocket and put it in your own. Buy buy buy.

AA2020. Tax only starts from now. So any warning from Jan are exempt.

So assume roughly 5.5bn is split evenly over 12 months. For the remaining 7 months of year that would be earnings of low 3bn. Apply 25% to that and you get to about 800.

Then they can offset against that 800.

So the tax liability is **** all given our capex spend in North Sea.

They have not changed it. Still at 600p.

Just gone all in. Mix of hbr and Serica.

All these companies will do is either crank up capex or bail on U.K. continental shelf. HBR have tolmount east and Serica have north eigg. Both projects now will qualify for this investment relief and essentially mean they cost **** all as will offset the tax.

On Serica, if north eigg hits then the likely development costs will be all offset /0 the windfall tax will be pretty much nothing.

He who dares Rodney. He who dares…..

Jefferies research report going name by name estimating the tax due for this year. Given the ability to offset U.K. capex the liability is **** all for most names in 2022.

Serica $64m
Enquest $ 14m
Harbour $107m

This is a HUGE buying opportunity. HUGE. Like the covid sell off.

Note says…

Serica guide to £60m capex in 2022. All is n the U.K.

We estimate earnings before tax in 2022 is $827m making 25% tax on a 7 month basis = $124m. Once the Capex investment shoes of 60m is applied the incremental tax due for 2022 will be $64m.

64m. That’s not even a rounding error given current gas price.

Gift horse. Look. Mouth.

Buy buy buy

Comment from them…

Harbour guides to $800m capex, $200m exploration and appraisal spend and $300m of decommissioning in 2022. We assume 90% of the 1am capex is in the U.K. meaning $720m of investment allowances per annum for harbour.

We estimate harbours U.K. Earnings before tax revenues n 2022 at $5.5bn. Assuming 25% tax on the 7 months remaining from 26 May = $827m incremental tax. HOWEVER if we assume 80% allowance against $900m U.K. investment capex we estimate HBRs will incremental new cash levy outflow in 2022 is $107m.

107m $$$$$. That’s £85m. THATS NOT EVEN A ROUNDING ERROR!!!!!

Gift horse. Look. Mouth. Blah blah.
Buy buy buy buy.

It’s really not. NE or any future new developments come in and all development costs will be offset against this tax and it will make absolutely zero difference.

NE drill is next quarter. If you have been invested here for years a few more months should be ok.

The structure of the tax is maybe actually a positive for Serica shareholders as it will stop management from hoarding cash. Yes they prob won’t do shareholder returns but it forces them to try grow the business rather than counting their gold.

https://www.bbc.co.uk/news/uk-61591517

That where your windfall tax is going

This government is a total shambles

Hey nkotb

I think does opposite tbh. Why would anyone buy NS assets now knowing that all your cashflows go to the tax man?

The industry is cyclical and the cycle WILL eventually turn. Serica not too bad but companies like enquest use times like this to repair the balance sheet and build up big cash buffers to add assets and prepare for the downturn. When the next downturn comes rishi is gonna reap what he has sown.

Only thing I can think may happen in U.K. is if we just announce we are gonna construct a big **** off wind farm. That prob makes sense tbh as we will offset the cost against taxes on gas and bolster or green credentials at same same. We have the cash to do that type of project and essentially it’s free to do. Or rather than free….if we don’t do it rishi will take the money Robin Hood style anyway. So you may as well do it rather than lose the potential offset allowance.

End of the company? Wind you neck in!!! They still have other assets churning out cash. You just have to pay more tax on that cash that’s all.

Whether NE is a hit or not you will still be able to offset the initial drill costs. And if it is not we will most likely buy other assets or fields and find new opportunities that way. The whole thing is structured to force companies to make invest. But the obvious issue may be that some just decide to invest out loads the U.K. which in my view is very very very likely.

Short term the government get some cash. Long term people invest elsewhere and the U.K. is even more reliant on other countries for energy. This will back forward on Robin hodd rishi and he will be made to lick the financially illiterate Pygmy dumbass that he is.

It’s worth adding their comment on north eigg also…

The impact, given the investment allowance offset, is most for those with low capex vs EbITDA (ie Serica). BUT…. “Should north eigg be successful then the development capex will offset a significant amount of the additional tax bill. With 80% relief (ie 20% of the additional 25% levy charged) being able to be offset. To illustrate, we estimate an unriaked NAV including north eigg of 656p pre the windfall tax. This would only fall to 610p post windfall tax as the cost would be written off aginanst the new tax”

Conclusion. Hope north eigg is a gusher.

Reduced price target to 350p but maintained buy rating

“Our initial take is this will cost Serica £290m over 2022/23/24 or c100p per share, although we think at least 100p per share has already been removed from the SP since early May due to fears of the tax being imposed. We retain our buy rating and move our target to 350p from 435p to reflect the impact of the windfall tax”

To put some numbers on it….the cost shell of this tax will be in the ball park $200m. Yeh, we really showing them big bad oil companies who’s boss. Or are we destroying the smaller guys who actually have North Sea assets.

I repeat. Robin Hood rishi sunak is a socialist dumass with no clue what he is doing here. He fundamentally does not understand this industry or it’s players. When the next downturn comes and people are abandoning the North Sea and leaving closed fields with no one to decommission. It will be that jebends fault.

The original post is exactly what I am on about on a previous thread. If people invested here don’t understand the application of a windfall tax then how do we expect jo public and the dumbass media and politicians.

It don’t matter where you are liaised. It matters where your production is located. This tax will only apply to assets and field on the U.K. continental shelf ie the North Sea.

Which is why the dumbass media going on about BP and Shell is ridiculous. Those two behemoths do pretty much **** all in the North Sea anymore. And this windfall tax ensures they will do pretty much **** all going forward either.

It’s a tax to appease the daily mirror with no logic behind it all all. And it will stop Serica, harbour, enquest etc investing as much here. I can guarantee that.

I burning the furniture to heat the house is not a good idea.

Having said that. The tax kicks in from 26 May. So our cash pile is insulated. And 3q we will spent a ton of cash drilling NE which will be offset. The stock is cheap. Very cheap. And this is a temporary tax so fill ya boots.

That dipstick sunak thinks he is Robin Hood. The structure of this help (get hitch is needed) will stoke inflation as you will get a load of dumbasses going on a shopping spree as soon as their cheques land in their bank accounts. Should have been done via vat and tax cuts not taking from one guy to give back to the same guy. That’s called socialism. Well done dumb ass rishi.

Booyaka booyaka when the general ah pass, booyaka booyaka m beat run the daaaance

That’s not true maverick. It’s not a permanent tax and if NE hit there is zero, none, zilch chance it comes online for several years. And this tax won’t be around then. As if it is no one will bother doing **** all in the North Sea apart from fishing off a load of scrap metal platforms abandoned by companies that have gone bust.

Because bp and shell pretty much do **** all in the North Sea. They were just used at the poster child’s for a windfall tax by the dumbass media and politicians who literally know nothing about this industry. It’s like saying we should retrospectively tax all U.K. retailers cos Amazon made too much money GLOBALLY during the lockdowns.

Absolute dumbasses.

So basically, we may as well just do a ton or drilling now and STOP HOARDING CASH!!!

Given the news today, I do believe that diversification need sto be considered. We are too tied to the UK and to mitigate stupid decisions like this we should look tyo M&A outside of the UK continetla shelf which Robin Hood Rishi cant touch us.

So Serica management…get your fingers out your butts and START INVESTING and STOP HOARDING!!! YOU ARE DESTROYING SHAREHOLDER VALUE with the current status quo.