Opportunistic and blunt tool were among the adjectives being reached for as Jeremy Hunt hiked and extended the so-called windfall tax on oil and gas companies.
The levy, which is added to base tax, increases to 35% - taking the effective rate of tax on UK oil and gas profits to 75% from 65%.
A significant caveat - the reimbursement of 91p in the pound for new investment, in the form of tax relief - remains, and is a major offset for large oil firms which will continue to see minimal outgoings to the Inland Revenue despite today’s latest headlines.
“The government continues to dangle the carrot of tax breaks to the oil and gas producers in order to protect investment,” said Jamie Maddock, analyst at Quilter Cheviot.
“This is politically controversial given there is no stipulation on what type of investment is permitted.
“The government has chosen not to tighten the rules around this, acknowledging how much it still needs these businesses. As a result, the government will continue with this blunt instrument that pleases few and remains murky on its effectiveness.”
In London, Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) shares both traded in positive territory after the Autumn Statement.
Harbour Energy PLC (LSE:HBR), the UK’s largest independent producer with just shy of 200,000 bopd), was however close to 5% lower at 317.5p.
Shares in Enquest PLC (AIM:ENQ), a smaller North Sea operator (producing close to 40,000 boepd) similarly fell a 5% to 25.9p.
Serica Energy PLC (AIM:SQZ) (which similarly produces c40,000 boepd and has stated investment plans) saw its shares dip 5.3% to 296p.
Hurricane Energy PLC (LSE:HUR) (a producer of about 9,000 bopd presently, and, is ‘up for sale’) slipped 1% lower to trade at 7.71p.
Small-cap explorer Deltic Energy PLC (AIM:DELT) (which is presently partnered with Shell in a well drilling campaign) climbed 4.34% to 3.6p.
Whilst it remains early days, and devil is often found in the details, so far there’s evidently was little to no evidence of panic amongst investors.
“We are yet to see a meaningful drop off from the likes of Shell and BP in investment, though it is likely to be the smaller players whose spending could be threatened by this further government intervention,” Maddock added.
“These smaller firms play as equally an important role as the giants in reducing the UK’s dependence on overseas oil and gas.”