An M&A lifeline in the North Sea
Assets that cut tax bills could be a blessing for UKCS operators looking for a bargain
Deferred tax assets (DTAs)—assets on the balance sheet that can be used to reduce taxable profits—can be a valuable prize for a prospective buyer of an oil and gas company on the UK Continental Shelf (UKCS). Oil and gas companies operating in the UKCS typically accrue substantial DTAs in their exploration, development and early producing years. This is because significant capital expenditure is normally needed for exploration and development, which can result in capital allowances—the UK tax equivalent of depreciation. This spending is generally funded, at least in part, through debt. Interest on that debt may be deductible in calculating UK taxable profits. DTAs can be valuable to a buyer o
Also in this section
2 May 2024
Faster-than-expected economic growth fails to mask macro imbalances and shifting structural oil product trends
1 May 2024
Energean CEO Mathios Rigas looks to results of critical Anchois appraisal well
30 April 2024
While its regional neighbours reap the rewards of oil and gas success, Iraq’s hydrocarbons sector is lagging behind
29 April 2024
Although recent, firmer gas prices have blunted some price-sensitive demand, the overall growth outlook remains robust