RE: The Future is Bright3 Jan 2022 13:19
HNY Sipp 10 and all.
From the prospectus the following clause shows that the BP profit share has a cap that allows for our ability to not pay tax. I too would like to know what is left but it is not a debt and all capex is recoverable before the calculation of their share is made.
"Waterfall mechanics and profit share
On completion of the Magnus Call Option Deed, BPEOC and EnQuest Heather will enter into a net cash
flow deed which sets out how revenue from the 75 per cent. Interests will be shared between them (the
“Net Cashflow Share Deed”). The Net Cashflow Share Deed will be effective from the date of signing
(on completion under the Magnus Call Option Deed) and will automatically terminate on the earlier of:
(a) the date on which the aggregate amount received by BPEOC under the profit share arrangements
equals $600,000,000/(1-TR), where TR is the rate of Corporation Tax in force on date of completion
under the Magnus Call Option Deed (not to exceed 40 per cent.) (the “Profit Share Cap”);
(b) the date of completion under the RSPA (see paragraph 18.3(b)(iii) of this Part 11); and
(c) the actual date of permanent cessation of production from the Magnus field (the “Magnus COP
Date”).
The net cashflow amount for the 75 per cent. Interests is calculated quarterly by deducting any costs paid
by EnQuest Heather in respect of the 75 per cent. Interests from all income received by EnQuest Heather
in respect of the 75 per cent. Interests. If this results in a figure greater than $0, such amount constitutes a
“Net Cashflow Gain”.
Each Net Cashflow Gain is applied as follows:
(a) first, to pay BPCO any outstanding amount of principal, interest (including incremental interest),
costs or other amounts, then outstanding and due under the Loan Agreement to which BPCO is
entitled to be paid pursuant to STWD (the “Loan Repayment Amount”) (but excluding
incremental interest);"
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