Kistos Share Discussion Threads

[billy ray] 19/11/2022 09:07

mariopeter,

spot on about Morocco - now there' a country that knows how to attract O&G investment with a very favourable tax regime (one of the many reasons I'm heavily invested in PRD):

* 5% royalty (first 10.6 Bcf free - equates to ~$78M in NET revenue) - and offset transport costs
* No govt tax for 10 YEARS

[for those not au fait with PRD, the recent Proactive presentation is worth a watch, from 10m45s for discussion on why Morocco is so attractive
hxxps://youtu.be/e25SVlLdo3s)

AA has stated he's only interested in acquiring producing assets which PRD currently isn't. However, PRD's plan is (on successful MOU-2 flow test) to rapidly initiate gas sales via a CNG development to local industry (a gas-hungry market). So within a couple of months, PRD could be producing and hence be a viable option for KIST.

So Morocco's a great country for O&G investment, with excellent profit margins - like you, I hope it's on AA's radar.

[mariopeter] 18/11/2022 12:16

Good spot X54

Taxes very burdensome in the UK now. Liked the £1B spending capability with no dilution.

Can see CHAR or PRD being interesting, the latter about to drill and very cheap for the target size. Both low tax Morocco and only gas. PRD onshore and fast to monetise and ready to do a deal if successful.

[ashkv] 17/11/2022 15:22

Two helpful/insight articles - the following was troubling / therefore the rest of the allowance will have to be allocated to such items like renewables/wind power for offshore platforms etc as I understand based on my initial take "The government said that it will reduce its investment allowance plan for spending on new oil and gas extraction to 29% of all investment expenditure."

financialpost.com/pmn/business-pmn/uk-hits-power-firms-with-windfall-tax-hikes-oil-company-levy

www.energyvoice.com/oilandgas/north-sea/461344/breaking-chancellor-announces-14bn-windfall-tax-hike-on-uk-north-sea-and-electricity-generators/

[billy ray] 17/11/2022 14:33

I can still see us progressing with Glendronach development and the Benriach exploration well next year, as this would add to the lifespan and value of the Shetland Processing facility.

However, AA's next move in terms of M&A will be very informative as to whether he thinks the UK is still a decent place to invest. Malcy tweeted last night that he suspected KIST was currently active in 4-5 data rooms so plenty of possible deals to be done. I'm sure AA is running his slide rule over today's EPL announcement and will decide where the best ROI lies.

If KIST, SQZ and HBR, for example, all decide to invest overseas rather than the UK, that'll send a pretty clear message to the UK govt about what we all think of the windfall tax!

[marvelman] 17/11/2022 14:19

But what's the point of investing when the ROI is now so poor and considering the enormous risks O & G companies need to take. It's get out of the UK more like.

[billy ray] 17/11/2022 14:12

The updated Energy Taxes Facsheet has been released:


So it appears that the cash value of the investment allowance remains broadly the same (actually, a few pence better!):

"This 80% Investment Allowance meant businesses would get a £91.25 tax saving for every £100 they invest – providing them with an additional incentive to invest. This nearly doubled the tax relief available and means the more investment a firm makes, the less tax they will pay.
Under the 35% levy rate, the government is reducing the rate of the allowance to 29% which, due to the higher rate, will broadly maintain the existing cash value of the allowance.
This means business will be able to claim £91.40 in tax relief for every £100 invested rather than the previous £91.25"

[billy ray] 17/11/2022 13:05

Hi Jeff,

From the gov EPL annoucement in May, it appears the Ivestment Allowance is remaining the same:

"The new 80% Investment Allowance will mean businesses will overall get a 91p tax saving for every £1 they invest – providing them with an additional, immediate incentive to invest. This nearly doubles the tax relief available and means the more investment a firm makes, the less tax they will pay."

[jeff114] 17/11/2022 12:54

What does the 91p mean? Can't find it mentioned in articles online

[billy ray] 17/11/2022 12:12

Jeremy Hunt's Autumn Statement re WFT:
“I have no objection to WFT’s if they are GENUINELY about windfall profits caused by unexpected increases in energy prices...
… any such tax, should be TEMPORARY, NOT DETER INVESTMENT and recognise the CYCLICAL NATURE of energy businesses
...From Jan 1st (23) until March 2028, we will increase the EPL from 25 to 35%…"

Interestingly, no mention of changing the 91p (in the pound) investment allowance so I'm assuming that still stands, which is a positive IMO

[blueball] 17/11/2022 11:09

750p short term target is too low imo..30p a day is possible.

[blueball] 15/11/2022 11:15

TTF up another 12% this am.

[blueball] 14/11/2022 16:53

Thanks vino.

[vino] 14/11/2022 16:48

Blueball
Fire at a gas rig in Norway

[blueball] 14/11/2022 15:52

TTF now up 15%.

[jeff114] 14/11/2022 14:55

Well it's the first cold day of the fall...topped up some at 378p

[blueball] 14/11/2022 14:45

TTF up 12% today for no reason.

[wolfofhounslow] 14/11/2022 12:15

They will include hiking the windfall tax on oil and gas giants from 25 to 35 per cent, cutting the tax-free allowance for share dividends and dropping the requirement for councils to hold a referendum on tax increases above 2.99 per cent.

[yawn1971] 14/11/2022 11:18

Black Friday Prices ?

[alxo82] 13/11/2022 11:13

The jackup Valaris 123 has arrived to the Q10-A for the workover.

[blueball] 09/11/2022 20:38

Change of direction..?

[blueball] 08/11/2022 11:04

Plenty of buys this am.

TTF rising too..trading above the 200 ma.

[mariopeter] 07/11/2022 07:40

ODigby

Picked that up (Front Month Dutch TTF Gas Base Load futures) from Tulip acquisition docs. Think it is the same now but do check.

XXX

Would hate to have a go at the tax but I did see that there would be a levy for 2022 (Only one year) something like 33% of profit over previous 3 years. Do remember it is Tulip who pays the tax and they have been operational for some time now (before KIST was born). Historic results for Tulip, I found in bondholder info on the website. Would be great if historic results were buoyant but don't think that is the case. When it comes to tax however no idea what the rate will be for 2022 but may be more than previous 50% charge (ignoring the fact that Dutch Government have 40% ownership of the field which may also make a difference to the tax rate but who knows the small print ..... there was an intimation of negotiation in the EU).

[officerdigby] 03/11/2022 23:49

Mario you sure? That would be good. If so I'll ask da management.Serica is day ahead confirmed. And IOGThought all producers had to as literally. its there on that day.Otherwise it's a kind of hedge on the months ahead production. Because they would be selling a guaranteed amount to be supplied a month ahead of actual production.

[xxx] 03/11/2022 14:12

Bearing in mind the recently announced Dutch windfall tax, does anyone have any views on how this affects profitability or better still worked it out ?