IGas to Pay GBP2 Million in 2022 Under New UK Windfall Tax -- Energy Comment
June 15 2022 - 4:02AM
Dow Jones News
By Jaime Llinares Taboada
IGas Energy PLC on Wednesday forecast that it will pay around 2
million pounds ($2.4 million) in respect of 2022 under the new U.K.
Energy Profits Levy. Here's what the London-listed onshore
hydrocarbon producer had to say:
On current performance:
"We continue to anticipate net production of c.2,000 boepd for
2022. As at May 31 2022, cash balances were GBP3.2 million and net
debt was GBP10.3 million, a reduction of GBP1.9 million since year
end."
"Operating cash flow before working capital movements expected
to be c.GBP21 million in 2022."
"Operating costs are now forecast to be c. $38.8/bbl driven
primarily by increased energy costs and general price increases on
equipment. However, positively, given IGas is a net exporter of
electricity, there is a forecast net benefit to IGas of GBP1.4
million, equivalent to $2.5/boe."
On the U.K. Energy Profits Levy:
"The government announced on May 26 2022 that it would introduce
an Energy Profits Levy on U.K. production. Whilst we are awaiting
the draft legislation, based on government announcements we believe
that IGas' ring-fence profits will be subject to the Levy."
"The Levy takes effect from May 26 2022, and based on current
forecasts we estimate a payment under the Levy of c.GBP2 million in
respect of 2022, taking into account our current capital
expenditure plans. Given this new Levy is part of a package that
includes significant investment incentives, we will evaluate
additional projects that could be brought forward to offset the
impact, once the details of the legislation are agreed."
"We have written to HM Treasury for clarification on the
definition of qualifying expenditure for investment relief for
example, in geothermal, which currently sits outside of the U.K.
ring-fence tax regime."
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
June 15, 2022 03:47 ET (07:47 GMT)
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