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Group: Energy Investing
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Irish Windfall Profits Tax...Stupid F'n Sloppy Press - updated WPT data a relief
I confirm Naamkat's assessment that the Irish WPT is sloppily written and still not clear to me in one regard, so I used the worst-case assumption of 60% rate for all profits exceeding threshold of 120% of base year (2018-2021) profits.
I also extrapolated VET data to determine Equinor's Corrib 36.5% WPT liability. It appears reasonably close to VET's 20% WPT liability on a proportional basis, especially the capex amount being negligible like VET. I think that since the Corrib field is a JV, all the revenue and costs are proportionate, except that Equinor may have made modest adjustments.
My conclusion is that VET management KNEW what the Irish WPT rates would be before published. How do I know? My WPT worst-case calculation reconciles approximately to VET's cc statement of WPT for 2023 AND 2022. I also concur with Naamkat that the market continues to trade as though the Irish tax announcement WAS BUILT IN to VET's estimated WPT liability estimates for 2022 and 2023.
Est VET WPT
4 year
4 Yr. Avg
Est. 2022
2017
2018
2019
2020
2021
average
plus 20%
YTD 2022
Est. 2022
less est deprec.
Difference
Tax @60%
Profit
Sales
205,150
104,274
58,446
214,425
259,592
Transportation
(5,129)
(4,459)
(4,425)
(4,205)
(2,826)
Operating
(15,366)
(12,431)
(15,232)
(14,889)
(11,893)
G&A
(8,386)
(2,491)
TBD
TBD
TBD
Netback
176,269
84,893
38,789
195,331
123,821
148,585
244,873
306,091
306,091
Production (mmcf/d)
55.17
46.57
37.44
29.25
27.96
Capex
224
1372
1823
1261
1707
Acquisitions
5572
0
0
1879
142
Depreciation
TBD
TBD
TBD
TBD
TBD
Reference Price NBP ($/mmcf)
10.35
5.9
4.3
19.62
37.15
Reference Price TTF ($/mmcf)
4.18
19.86
52.5
Tax rate
25%
25%
25%
25%
Cumulative Tax pool (loss)
(1,327,743)
(1,128,178)
(944,053)
Tax losses can be carried forward and applied at 100% against taxable income
