Hartshead Resources' Review of UK Gas Project Economics

Hartshead Resources NL (ASX: $HHR) is reviewing the project economics and timeline associated with its Phase 1 development plan in the UK Southern Gas Basin, given the proposed changes in taxation policy from the UK Labour Party. The Labour Party's proposed increase in the Energy Profits Levy (EPL) from 35% to 38% would lead to an increase in the headline tax rate to 78%, up from 75%. Additionally, the removal of the investment allowance on the EPL would reduce the tax relief on capital investments from 91.4% to approximately 46%. The company is presently assessing the impact of these proposed tax changes, especially with the Labour Party leading in polling ahead of the elections scheduled before 28 Jan 2025.

Executive Commentary on Labour Party's Proposed Tax Changes

Chris Lewis, Hartshead CEO, expressed disappointment at the proposed tax changes by the Labour Party, stating, 'The announcement from the Labour Party on the 8th of February was disappointing for the Company, our Partner, and our Shareholders as it introduces uncertainty into our development project, which before then had been moving forward with significant momentum. The danger is that these proposals will cause a flight of capital to other jurisdictions, decimate the skills and supply chain required for the UK to lead the energy transition and result in the loss of tens, if not hundreds of thousands of jobs. We are working with industry bodies, industry partners, contractors, unions, MPs and other stakeholders to understand the precise plans and to highlight the danger of damaging and self-defeating policy. As the situation develops and becomes clearer, I look forward to updating shareholders once more.'

Summary of Hartshead Resources' UK Gas Project Review

Hartshead Resources is currently reviewing the project economics and timeline associated with its Phase 1 development plan in the UK Southern Gas Basin due to the proposed changes in taxation policy by the UK Labour Party. The proposed increase in the Energy Profits Levy (EPL) and the removal of the investment allowance on the EPL have raised concerns about the potential impact on the company's development project. Additionally, the softening of UK NBP gas prices and gas futures, attributed to an unusually mild winter in Europe, has further added to the uncertainties. The company's CEO, Chris Lewis, highlighted the potential adverse effects of the proposed tax changes and emphasized the collaborative efforts with various stakeholders to address the situation. As the company continues to assess the impact of the proposed tax changes and the evolving market conditions, shareholders can expect further updates on the project's progress and the company's response to the challenges.