Ann: Triangle Awarded Half Share of Significant UK Gas Field, page-13

Been excited by this announcement today and have had a couple of good questions thrown at me.

1. If the deal is so good why didn't the majors jump on it?
That comes down to timing. The 33rd licensing round was launched on 7 October 22 and closed on 12 January 23.

At the time of the launch the governments Energy Profits Levy was due to end in December 2025. The EPL provided a 90% capex rebate and a 75% windfall tax on revenue. On 12 November the EPL was extended for another 2+ years through to March 2028.

So 5 weeks after the launch of the 33rd round the tax regime was altered to make new developments significantly more attractive. But by then TEG/Athena had already lodged their application.

2. The project is to big for TEG/Athena
Yep, way to big for them! Athena already hold acreage around this license and, I'm guessing, would already be talking to existing producers about farming in.
The extension of the EPL means that these producers either pay the 75% tax rate or invest in new projects to offset this tax against capex. The farm in terms can be quite generous as farm in costs qualify as capex. A good recent example is HHR's farmout to RockRose Energy (Viaro) in April.

IMO TEG/Athena could very quickly parlay this transaction to retain a meaningful position and generate a free carry. TEG are doing a lot for a little company but this transaction could prove to be TEG's own "Bradbury moment"!