Cove Energy Share Discussion Threads

[talkman2] 02/3/2012 07:51

I meant revenue coming into the country.

[talkman2] 02/3/2012 07:50

I am sure however they do not want to send out a negative business signal which could delay developments and revenue coiming into the government.

[woodster71] 02/3/2012 07:47

problem is nothing goes through without Moz gvmt approval. So whether they call it CGT or not they want a piece of the action or nothing gets approved. It just sounds more legitimate if it looks like a formal tax as opposed to a rather Large Brown Envelope. So whether its CGT or LBE, this could drag on for a while

[talkman2] 02/3/2012 07:37

If there is a share offer , with no cash involved. the Mozambique govt wont get any CGT . Will I expect as a cove shareholder who accepts a paper offer by say Shell expect a CGT bill from the Mozambique governemnt when I sel my Shell shares in the future ?!!!

[aaainvestment] 02/3/2012 07:33

Hypothetically then by the Mozambique logic if Shell was bought out by EXXON then they should pay Capital Gains in all countries in which they have assets.

Don't companies have a head office locations in order to pay taxes where they are comiciled - hence tax havens - surely, if true, this has massive implications for attracting investment in Mozambique.

[talkman2] 02/3/2012 07:33

miti 1000 .To whom ( and what government ) will my liability be to if I say get shares in Shell for my Cove holding and then sell them ?

[talkman2] 02/3/2012 07:29

Of course for me personally when I sell my shares in say Shell but not to the Mozambique governemt . How can Cove pay CGT to the Mozambique govt when it is getting shares. The constitution of Cove is individual shareholders.

[miti 1000] 02/3/2012 07:26

Talkman, don't talk rubbish.Of course there will be a cgt liability in your example..beggars belief

[talkman2] 02/3/2012 07:16

There is a very simple answer to any possible CGT question for Cove going forward.

If the offer by Shell ( or PTT or any other future suitor ) is ammended to shares instead of cash there can be no CGT issue or implication for Cove with the Mozambique government. I am sure the management are aware of this.

Cove shareholders might welcome , say , the possibility of shares in Shell , enjoying the large dividends and more possible upside in Mozambique and the the realization of the potential in Kenya.

This is a different issue altogether from the cairn / india and Tullow- Heritage Oil - Ugandan tax issues. They were asset sales for cash. This is a full takeover of the company.

[steeplejack] 02/3/2012 07:10

Well,it's news to Cove by all accounts so one must presume it's a potentially new irritating complication.African officialdom will love this one,could keep them busy 'til Christmas.

[plunger2] 01/3/2012 20:40

Yes I agree with the "storm in a teacup" theory.
The bidders all knew they were buying a company - being COV.
They also knew the potential for Moz to levy a tax on the company - leaving the company pregnant (so to speak!)with a tax liability. Hence (assuming a reasonable rate) it should have already been discounted.
I find it hard to believe that Shell would have been proceeding on any other basis. And given that UBS were advising PTTEP they're bound to have picked it up also. This, after all, is what due diligence is all about.
Can you imagine all the arb. funds, who have been buying, not believing that all this had been factored in?
We'll know more tomorrow but this smells of typical end of day rumour, stumour and panic. The brokers love it.
Feels like I've been stung by a Mozzie!
JMHO DYOR

[talkman2] 01/3/2012 19:09

How can we pay CGT to Mozambique for our Kenya assets etc !" Sounds a bit of a storm in a tea-cup. I am sure this has already been considered in the bids already made.

[deckav] 01/3/2012 19:05

Hold your nerve everyone !!

[rus4] 01/3/2012 19:02

Surely if there is any potential tax liability the bidders would have taken this into account before making their bid. Taxes paid at this stage would reduce the amount of tax to be paid when the gas is flowing

[horndean eagle] 01/3/2012 18:26

The difference between Cairn, TLW and AFF disposals is that Cove are selling up entirely rather than divest a stake in the project. That would explain why Cove put themselves up for sale rather than look to farm down. If they went down that route they would end up with a CGT bill.

[aaainvestment] 01/3/2012 16:56

If they decide to tax, first they have to apply that across the board and that could severely hinder expansion of the whole industry within the country and investment in general if other companies percieve the government as being unreasonable(to put it politely).

They also have the have legal grounds to do it or it will go to court - worry might surpress the share price but I expect it to be a storm in a teacup.

[plunger2] 01/3/2012 16:39

If they tax the sale where would that leave the APC or ENI later farm downs?

[kayfash] 01/3/2012 16:37

I don't know what caused the share price fall. However, I got in at 223p.

Now let the bidding war commence!

[verymaryhinge] 01/3/2012 16:36

By Gaurav Panchal
March 1 (Bloomberg) -- Mozambique "still working on how
much tax" would be paid, resources minister Esperanca Bias
says.
• Mozambique will advise Cove Energy on tax when deal concluded
• Cove shares fall as much as 5.4% after comment, now 3.3% lower
• Feb. 29: Cove Energy Sale Would Need Mozambique Approval, Minister Says {NSN M05EY26KLVR4 }
• Feb. 28: ONGC Videsh Says No Decision Made Over Cove Energy Offer {NSN M03LPQ6S972A }
• NOTE: Thaliand's PTT Exploration trumped a GBP992.4m bid by Shell for Cove, said it expects high competition from international rivals.
• Cove owns a stake in a deposit in Mozambique that may hold enough gas to justify exports to China, India

[randommunkey] 01/3/2012 16:35

leaky indians not bidding would be my guess

[aaainvestment] 01/3/2012 16:32

Reason for fall anyone?

[angels share] 01/3/2012 16:31

apparently Mozambique plans to tax sale https://twitter.com/KavanaghKillik

[plunger2] 01/3/2012 16:30

Have the Indians got lost at the pass?