The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
I'm with you Tarmak and have been adding and will continue to do so as I see more upside 'shocks' as we go through the two or three weeks.
I don't mind the shorters as they are traders who create the entry points.
The bigger picture shows that the debt will halve this year and this has been the millstone around this company's neck.
As we hit 2023 and Hedges fade away and debt further reduces the cost of the hedges and reduction in interest paid will more than cover the tax. The tax itself can be offset by actions taken by the company and I have faith that this will happen once they get clarification from the Government.
The tax was poorly planned and rushed out to deflect from Partygate and it has yet to be moved into legislation. It looks like it was more than double what even Labour had planned and with many Con's against it I wouldn't be surprised to see modifications.
The AGM is three weeks away and I fully expect AB to put it all in context and pour oil on troubled waters.
I'm reading this morning that one of the things that prompted this tax was Looney's statement a few days ago that a windfall tax would not alter BPs North Sea investment plan (he really should keep his mouth shut, but appears to be a slow learner). BP of course has since said it will review its investment plan in the light of the tax.
GLA
https://www.reuters.com/markets/europe/harbour-enquest-serica-shares-slump-uk-windfall-tax-2022-05-27/
Jeffries commentary
I think the other item that needs to be factored in when estimating how much the WT will cost is that it won't include Malaysia which is around 10% of production and possibly profit. So as I said earlier this is not the end of the world. Assuming high oil prices continue it will have a larger impact in 2023. Once the RBL is sorted in 2023 it frees ENQ from the hedges which, again if the OP remains decent will counter any impact.
Hi L3, I think you are confusing 'Tax Relief' and the new 'Investment Allowance',
Infills and workovers are costs which are deducted from profits. As they are deducted from profits they do not attract the windfall tax, they mitigate it.
I'm not clear what is within the scope of the new investment allowance, perhaps this is one of the items ENQ are seeking clarity on. you may be correct that they won't attract this allowance but equally given that its intent is to increase North Sea production the is a good case to have it applied to such items.
My reading of this is that enquest will have to pay 25% tax on profits (not cashflow) so in this financial year it will be approx 7 months worth of profit at 25% minus whatever can be offset for exploration/investment/financial wizardry.
I don't think it's the end of the world.
The best thing about today's RNS for me was that FPSO has finally set sail from Singapore. All being well it should be in production by early September.