Hi @Mitchdon. Re your cf model, have you calculated in the change in tariffs to RR from owning the pipeline and terminal infrastructure? Ive not had a chance to update my model yet but I suspect a 10% cost saving on 60-80% and an income from HHR’s tariff is going to change the IRR dial, possibly over 30% .
On a different note, I’ve been pondering the political position of the independents recently.
They claim that they can’t make a buck from the North Sea production because of labour’s policy. But I’m not so sure. As I mentioned the other day, the total tax rebate across corporate tax, investment allowances and capital allowances is likely to drop from 94% to 80-85% ( my bet is 85% in line with Norway) under labour’s new policy, which certainly isn’t a deal breaker.
So the only other reason why the industry has dropped anchor and refused to acquiesce to labour at this point has got to be about political point scoring.
There seems to be a game of “who blinks first” going in which seems somewhat self defeating from an industry point of view. I was always taught not to fight City Hall, but it seems the industry thinks otherwise…what do they know that no one else does? Perhaps it’s the fact that as the government progresses, it will become increasingly desperate for tax revenue and the only way to generate more from the North Sea oil and gas producers is to incentivise development?
HHR Price at posting:
0.5¢ Sentiment: Buy Disclosure: Held
(20min delay)