RE: IC - Podcast / Interview with ST10 Dec 2022 09:58
Agree Bullson. Given the most recent update they still sound confident (where they knew about the EPL enhancement) .. ST also sounds confident IMO ..
I thought this part of the statement was interesting ..
‘although a future revision was not ruled out should prices slump, the sources said.’
The floor probably wouldn’t have kicked in for a while because it would have been set low..
The world is starting to impose windfall taxes.. there is a significant investment incentive here
And a change of government is more than probable in 2024
I’m not sure a floor in the short term would have made them that much more confident given this ..
I suspect existing producers know this.. windfall taxes are springing up everywhere and there is an attractive investment allowance here that you can use to mitigate.
Surely the logic has to be .. find a development asset.. use the taxes and focus on volume (ie more production) to achieve quantum £s, accepting that margin rate will be weaker.
DYOR but I am hoping this now clarifies the position, not saying I like it.. the tax change is imminent.. so ultimately it accelerates the farm out / capital event for JOG. I note the other big fields (the two larger than Jog) appear confirmed to go ahead ..
DYOR.. but I think this clarity may accelerate things.. the message from the government is we’re not budging (for now) .. make sure choice and get on with it.. but the tax is coming in 2023
I think those are the hard facts
Oddly I feel quite optimistic about it as it’s less clear what the alternative choices are other than leave (unlikely if you’re committed and still making something ) or pay more tax (why would you if you could develop something that gives you more volume with the tax, albeit at a weaker margin)
IMHO
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