The Chancellor has announced the introduction of a New Field Allowance, which licence holders will be able to offset against Supplementary Corporation Tax ("SCT") (20 per cent), both on the UKCS and onshore. It will also ensure investment by independents, in addition to global energy players, in this key hydrocarbon producing region. Heavy oil related developments have been given a Field Allowance of GBP800 million by HMT as a specific target.
On the basis of these provisions applying to Nautical and its UKCS heavy oil interests the Directors believe that the New Field Allowance will enhance the value of the Company's 35% share of Kraken by GBP56 million and also Nautical's 26.67% share of Mariner by GBP43 million.
Commenting on these developments, Steve Jenkins, Chief Executive Officer ofNautical, said: "Nautical Petroleum is pleased by HMT's announcement of the new allowance. Itprovides a worthwhile incentive for Nautical and its partners to maintain theplanned programmes to achieve the Field Development Plan and oil production forthe two fields. It will improve the profitability of each of these developmentsand encourages Nautical to continue to explore and develop further opportunitiesin the UKCS."