Fundamentals and General Discussion, page-227

Hi @Onspeed, firstly thankyou for all your posts on FDR, some great insights. IMO the re-revised Energy Profits Levy could prove very significant to FDR given their current holdings.

The EPL has arrived at what should be a close to final version, fingers crossed. Now that it is extended through to March 2028 existing producers need to either pay the tax or seek out qualifying capex to offset it. Licenses in near term exploration wells is what Finder has which would provide that qualifying capex.

The super-deduction for capex. means that negotiated farm in terms will also be higher. At a rough net $1m cost for each $10m in capex farminees can afford to pay more. As you mentioned some time ago a multi-license farm in could generate the scale these bigger producers are looking for.

The recent HHR transaction is a good example. HHR's total farm in benefit was $196m however the net cost to Rock Rose, who farmed in, was closer $60m. (with the UK govt funding the remaining $135m)

Never been a great fan of govt market intervention however this current system puts FDR in the box seat for some attractive farm outs.