Some Data Points From UK's North Sea -- March 15 ,2 016

Iditarod update: It looks like we have a winner? Dallas Seavey has won three of the last four Iditarods. At the moment he is in first place. He and Mitch Seavey have finished the race and are in 1st and 2nd position respectively. Dallas: 8 days, 11 hours, 20 minutes, 16 seconds. It looks like this breaks the record set last year: 8 days, 18 hours, 13 minutes, 6 seconds.

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UK's North Sea Bust

From Rigzone there's a great article on the future of UK's North Sea oil industry. It's a boring article on tax structure and one analyst's argument that the UK needs to restructure (euphemism for "lower") taxes on North Sea oil production. Be that as it may, look at some of these data points and/or comments:

• in order to reflect the maturity of the UK continental shelf (UKCS): maturity of the field
• low oil prices affecting entire economy of Scotland; does this sound familiar?
• hotel occupancy: a 15% decrease; does this sound familiar?
• housing sales: down by 14% during the previous 12 months; does this sound familiar?

But look at this. This is incredible. I cannot get my hands around big numbers, but even so, this is amazing:

• investment in the UKCS will be less than $1.4 billion this year (2016)
• compare that to a typical level of $11 billion annually over the last five years

Again, the oil industry is going to go from $11 billion annually (for the last five years) to less than $1.5 billion this year in the UK North Sea. Wow. In the US, operators have cut back from 20% to 50% but nothing like this.

Current UK taxes on the oil and gas industry:

• 50% tax on production profits
• 67.5% for older fields

And we thought it was bad in the Bakken.