UK: Hartshead Resources NL (ASX: HHR) has announced that despite uncertainties surrounding future fiscal policies, the P2607 Joint Venture (JV) remains committed to advancing the Phase 1 Gas Field Development of the Anning & Somerville Gas Fields, with the 2024 JV budget firmly in place.
Hartshead CEO Chris Lewis stated: “The Joint Venture continues to work to move our gas development project forward, looking at innovative funding arrangements to potentially reduce upfront capital expenditure (CAPEX).
“Discussions with policymakers and other stakeholders have been encouraging, and I anticipate that a pragmatic solution exists to enable the continuation of the oil and gas industry in the UK.”
Ahead of the upcoming UK parliamentary elections expected in Q4 2024, Hartshead has been actively engaged in discussions with various political stakeholders to gain clarity on potential changes to the oil and gas fiscal regime.
The company emphasises the importance of establishing a fiscal environment that continues to attract and support investment in the sector.
To mitigate the financial impact of these uncertainties, Hartshead is exploring innovative financing solutions for project infrastructure, aiming to significantly reduce the initial CAPEX required.
These discussions focus on shifting CAPEX to operational expenditure (OPEX) through tariffs on third-party infrastructure investments, thereby lessening the funding burden on Hartshead.
In a strategic move to preserve its strong cash position, Hartshead has implemented a cost reduction initiative, targeting a decrease in contractor headcount while maintaining a core team to support the JV’s ongoing and future development phases.
This initiative is expected to result in substantial savings in monthly costs for both the JV and Hartshead directly.
The company also notes the strengthening of UK NBP gas prices to approximately 70p/therm, a positive development amidst the backdrop of a mild winter in Europe and high gas storage inventories.
