Member Info for Stupmy

That's why I've always viewed it as being an excess profits levy rather than an energy profits levy, but with no floor it's got nothing to do with excess profits or 'extra-ordinary profits', it's all profits. It's destroying SH value that's for sure.

I'd much rather have it in March than in the Autumn. That is a big drop in POO.

The embargo on buying oil and refined products has come into force properly in the last couple of months. Although india and China are buying the oil from Russia, they don't want refined products (cheaper to refine it themselves). Turkey is still buying refined products, but Russia is now having to shut down it's refineries. The way I understand it, even if there was a cessation of hostilities and a lifting of the embargo, you can't just bring them back into service the drop of a hat. I'd imagine the draw on refined products is down to those countries following the embargo/price caps etc on Russian oil have now worked through their existing orders and have to source it from outside Russia.

That's not that great for us I'd imagine. We're reigning in capital expenditure to pay down debt, so once again we're not getting the best out of the governments offer. I'd imagine if debt was where we needed it, we'd have higher capital expenditure and that would to a certain amount offset the EPL. As it is, we're cutting right back on CAPEX to clear our pricey debt (9% some it).

I'm trying another long. Hoping the POO will bounce and the HBR will bounce with it. Big drop today, I think we'll claw some back, but if POO continues lower, I fear the HBR SP will too. I'd like to know what the capital expenditure bit of Hunts budget means to HBR. 100% of capital expenditure for the next 3 years comes from profit before tax. So I guess the more your capex, the lower your tax on profits. Still difficult when you're paying down debt and limited CAPEX, particularly in an envronment where fresh borrowing would be trickier (particularly in the fossil fuels arena).

He's moved on from energy independence with no comment on fossil fuels. No change on the EPL I fear today.

Nuclear power to be classed as environmentally sustainable, giving it access to green energy incentives. Carbon capture to get 20billion in incentives. Nothing yet on Fossil fuels.

Every single pound spent on plant, equipment etc can be taken from profit before tax? Have I understood that right and what does it mean for us? All drilling costs are taken from profit before tax?

According to a wide variety of experts, the effects of the US bank collapsing should not lead to a great deal of contagion. The view being pushed forward is that there is no structural problem with the US (and I guess European) financial system. That's either true or it's not true. One thing to note, is that some of these experts have been very critical of experts with the opposite view and suggest that voicing the negative side of e.g. SVB was what caused the run on the bank. So, on the one hand they're selling the soft landing story and on the other saying it's irresponsible to talk about the hard landing side as it triggers fear etc. That really suggests to me that they are toeing the political/wall street line and trying to shore up the problems with words. In my view, and I'm not an expert we will see some horrible drops almost across the bord, drops that people can't even imagine at the moment. And let's say that 'the financial system' is not structurally unsound, I don't think it's going to matter. People are frightened, they are running for the doors. It'll be like a run on the SVB bank with people pulling their money out. Maybe it would take another casualty before we see it and Credit Suisse seems imminently well placed to be that casualty, but I think we're in for a nasty period. Credit Suisse have identified some significant weaknesses in their systems, they've also been accused of some skulduggery. If any of it makes them illiquid, this really is not the time for them to exposed to stockmarket panic.

Citadel Advisors have increased their short position by 0.01% to reach a declarable level of 0.5%. We have no idea about short positions below 0.5%, but apparently there are some. I'd guess that they have mainly come about due to the EPL. It won't help buy side sentiment.

The sooner it's in place the better. Even at 70 dollars it's a big step forward from where we stand today. Looking at the articles being published it seems that they're considering applying it in Autumn, bit late really. It didn't seem to take them long to put a shoddy EPL in place in the first instance. Not sure why they can't quickly modify it in the budget. If it's worth doing (and it clearly is) why not do it now.

Posted by Dumbly on ENQ board, suggests there may not be a change to the EPL in tomorows budget. I have closed my long here as if there isn't, I assume the price will fall back.

https://www.politicshome.com/news/article/treasury-windfall-tax-price-floor-budget-energy-profits-levy

The idea of a change to the EPL in the budget hasn't set our SP alight, but it's lit a fire under Harbour. I've taken my profit there as if no floor is announced, I'd imagine it'll come back off.

I didn't really understand that Dumbly, if there's a floor in place, what value would it have if we still paid the EPL on the whole of our profits?

I've done the same hitman (here and Harbour).

Modestus just posted the same thing on the ENQ board. If it's true and if the floor is reasonable (70 dollars a barrel?) then it could draw a line under current SP falls. Harbour have made provisions for the EPL to 2028 (wiping out this years profit), but a decent floor to the EPL could give us a bounce. I've entered a long position in the hope we will get some relief here.

That is great news and makes NS oil & gas much more investible. I didn't see a hint of where the floor was to be placed, but if it was 70 I'd imagine we'd get a positive response in the SP, nice find Modestus.

No

The embargo on Russian Oil/gas and derivatives came into force in Feb and has already impacted revenues derived by Russia. How will their reduced exports affect POO, is it enough to give it a lift?

I think we have to wait and see on that front Chilt. 3 banks have now failed. I think in 2008 it was March 14th that the first one went down, then Sept when the next one went down. So there was a decent period of calm before the systemic nature of the problem became apparent. I've believed we need a market reset for a while and this could be the trigger that gets that going. Be very interesting now to see whether the risk of contagion gets Powell to slow down or pause his interest rate hikes. So far the market has shrugged off those hikes, but the recent hawkish stance from Powell seems to be getting the markets attention, that fact that the interest rate hikes are now causing casualties of big companies int he financial sector (plus FTX prior to that; different causes perhaps) gets me thinking that investing confidence is pretty fragile. Also the observation that there are 640 billion worth of undeclared losses on hold to maturity securities in the financial sector (apparently) means others may be at risk. Very interesting. I closed all but my core holdings today at a loss. I've not sold ENQ but do believe there's a strong chance of us seeing 14p, the when we see it very hard to predict. I've been shorting the FTSE today, not been able to build a risk free position yet, but if it continues to fall I might.