Third Energy’s fracking site at Kirby Misperton. Photo: Claire Head
The company behind plans to frack at Kirby Misperton in North Yorkshire released its long-awaited 2016 accounts this morning, declaring a loss of £3.405m.
The accounts, due more than four months ago, showed Third energy UK Gas Ltd, owed £55.7m to parent and sister companies.
The delay in publishing the accounts was cited by the Business Secretary, Greg Clark, last week as one of the reasons there had been no final decision on whether fracking should be approved at Kirby Misperton. Mr Clark said he had asked for further checks on Third Energy’s financial resilience. DrillOrDrop report
Details
The total loss for the year to the end of December 2016 was down by 12% on the 2015 figure, continuing a trend since 2014.
Turnover was £757,000, up 76% on 2015, but still below the 2014 figure of £897,000.
The total owed to companies in the group increased by 10% or £4.8m.
The amount owed to the parent company, the Cayman Islands-based Third Energy Holdings, was £48.16m. This was up from £44.475m in 2015 and £40.667m in 2014.
According to the accounts, this sum is repayable on demand. But the directors of Third Energy Holdings had confirmed it was “not their intention to seek repayment of this amount within the 12 months following the signing of these accounts”.
Third Energy UK Gas Ltd said in the accounts:
“The directors believe that, with the continued support of its parent company, the Company can continue as a going concern, and has the necessary funding available to ensure that it continues to trade on the going concern basis, for the reasonably foreseeable future.”
Tax asset
Third Energy UK Gas Ltd paid no tax in 2016.
Should Third Energy UK Gas Ltd start making a profit, it could pay £33.3m less in tax because of accumulated tax losses and accelerated capital allowances.
But for a second year, the accounts said the tax asset had not been recognised because:
“it is not certain that the Company will have sufficient taxable profits for the losses to be utilised in the foreseeable future”.
Pay and staffing
The accounts show that Third Energy UK Gas Ltd employed 16 people in 2016. There were no figures for payments to directors because they were made by Third Energy Holdings Ltd. Its accounts are not available.
Key figures
Total loss: £3.405m (2015: £3.854m, 2014: £4.416m)
Turnover: £757,000 (2015: £428,000, 2014: £897,000)
Sales of gas to fellow subsidiary: £75,000 (2015: £399,000, 2014: £667,000)
Recharges to development partners: £682,000 (2015: 29,000, 2014: £230,000)
Intangible fixed assets: £24.094m (2015: £22.403m, £20.607m)
Tangible fixed assets (mainly gas development and production): £619,000 (2015: £896,000, 2014: £623,000)
Operating loss: £3.216m (2015: 3.676m, £4,245m)
Net current liabilities: £54,652,000 (£2015: £50,019,000, 2014: £44.270m)
Owed to Third Energy Holdings: £48.165m (2015: £44.475m, 2014: £40.667m)
Owed to fellow subsidiary companies: £7.544m (2015: £6.396m, 2014: £5.147m
Staff costs: £540,000 (2015: £624,000, 2014: £593,000)
Total staff: 16 (2 managerial and 14 operational/technical) (2015: 18, 2014: 18)
Admin expenses: £2.205m (2015: £2.252m, 2014: 2.138m)
Tax paid: £0 (2015: £0, 2014: 0)
Group structure
According to the accounts, the immediate parent of Third Energy UK Ltd is Third Energy Onshore Ltd. The immediate parent company of Third Energy Onshore Ltd is Third Energy Holdings Ltd. The ultimate parent company of Third Energy Holdings Ltd is Barclays Bank PLC
Other accounts
Also published today are accounts for three other companies in the Third Energy group.
Third Energy Trading Ltd, which generates electricity from gas produced by group companies, made a loss in 2016 of £1,162,000 (2015: £694,000). Turnover was down £1,025,000 (2015: £1,534,000), as were cost of sales (the direct cost of business): £1,627,000 (2015: £1,650,000)
The accounts for Third Energy Onshore Ltd, described as an intermediate holding company and a subsidiary of Third Energy Holdings Ltd, showed no details of profit before taxation. It had net assets of £262,000, unchanged on 2015: £262,000. Lord Gadhia, a Conservative Party donor, was appointed a director of the company on 22 January 2018.
Third Energy Services Ltd, which provides management to fellow group companies, made a profit for 2016 of £319,000 (2015: £96,000). According to the accounts, it employs 11 staff and other companies in the Third Energy group owe it £9,828,000 (2015: £6,922,000).
Categories: Industry
DRILL OR DROP? 
Loss coming down, debt secured, and increased turnover. What’s needed? A further increase in turnover.
What’s not to like, Greg?
What is not to like? Well, lets see shall we?
“Limited companies have a number of filing and reporting requirements to fulfil for Companies House and HMRC on an annual basis. It is the responsibility of company officers (directors and secretaries) to submit an annual confirmation statement (previously called an ‘annual return’), annual accounts and tax returns by the statutory filing deadlines.
All corporation tax liabilities must also be paid within a certain timeframe. Failure to do so can result in significant late filing penalties. In severe cases, director disqualification and company dissolution can occur.
Annual returns
A confirmation statement must be prepared and filed at least once every 12 months. The deadline is 14 days after the anniversary of:
Company formation
Made-up date of the last annual return
Confirmation date of previous confirmation statement
All LLPs and companies, including dormant companies, must prepare a confirmation statement for Companies House.
It is a criminal offence to fail to deliver at least one confirmation statement to Companies House every year. Directors can be personally fined by the criminal courts. Companies can be struck from the register if a statement is not filed at all. However, no late filing penalties are imposed if the statement is delivered a little late.”
That seems an adequate reason for not being “liked” all though perhaps “solvent” is more the more accurate term isn’t it? Also, rather than just announcing these….accounts…..interesting word that, these…..accounts……are being processed, no doubt with more than the average fine tooth comb. Who knows what critters will fall out?
“Directors can be personally fined by the criminal courts” Now isn’t that interesting? [Edited by moderator]
Perhaps also what is not to like, is you calling him Greg?
The antis will generally not understand the term ‘speculate to accumulate’ as they are risk adverse. They don’t understand that we need people that are prepared to take risk at their own expense for the greater good of humanity.
These accounts are exactly what was expected and I imagine Greg is only using their submission as delay tactic to appease the moany mob.
One step closer to kick off.
So Gottabkidding if the money is coming from Barclays Bank and all the directors are getting paid very well – who is risking their own money here? It’s the publics money invested in the bank? Do you know that the nearest town within 5 miles is the only one in the district to suffer falling house prices at a cost of at least £60 million to the local population? What’s to like here from a financial perspective? The power station arm using the gas also made a loss last year? £50 million current liabilities to the Cayman Islands and probably risen a lot in the past year and £3million turnover? Most assets “intangible”. You won’t get a lot worse than this from an operating company.
Actually, some dude, if you understand the e&p industry, you’ll know that often “e” companies run losses for long periods of time as they work toward becoming “d” companies. That is certainly the case with TE. The losses are well within expectations and investors see the development cashflows as enticingly near. If housing prices behave in the same manor as they do in other successful oil and gas plays, they will rise. So, I wouldn’t get my panties all in a bunch about near-term operating results if I were you.
“I wouldn’t get my panties all in a bunch about near-term operating results if I were you.” – I would if I were watching third energy’s accounts and had money invested.
Don’t bank with Barclays then and stop preaching for others as they don’t care what your own personal viewpoints are. This is the constant problem with the left, minority preaching to the masses.
The problem with you Peeny is that you generalise instead of thinking 😉
“prepared to take risk at their own expense for the greater good of humanity” Oh my giddy aunt, Peeny! You get funnier every time you post 😂
And you don’t get any wiser Hobbit.
Peeny if I did you’d look even sillier by comparison x
‘They don’t understand that we need people that are prepared to take risk at their own expense for the greater good of humanity.’ – have made you an urgent appointment on Monday at 9am.
‘‘speculate to accumulate’ – in this instance read, make many companies to draw off salary and finally declare insolvency.
Not a great choice of words “people that are prepared to take risk at their own expense”. Risk takers eh?
Maureen you just proved my point perfectly…. Thank you.
[Comment removed by moderator]
Funny, Some Dude, that the house prices were fine for the last few decades whilst Third Energy have been operating quietly and efficiently and then seem to have dropped when a bunch of noisy, antisocial protestors turn up. Perhaps dog owners dropping out of the buying sector as well?
or perhaps conventional onshore O&G has been going under the radar for years, however with the emergence of HVHF and the Dash for Gas in the UK maybe people began to take notice. Not helped by a Government imposed moratorium as a result of seismic activity caused by the big Cs operations in Lancashire, possibly providing a moment of clarity for some of the population.
Thank you very much Ruth for clear analysis of Third Energy financial position. The responses of admirers of Third Energy as an entrepreneurial venture are absolutely bonkers. It’s a house of cards, with a big get out of paying tax in the UK, and nobody risking own money, except as is said above, Barclays Bank. A sleight of hand. As for the good of humanity, where does such ignorance come from?
Hmm – Third Energy’s parent is the Cayman Islands-based Third Energy Holdings.
Hmm – AJ Lucas new investor is the Cayman Islands-based RodDCO Property Holdings
Hmm – Cuadril;a part owner is the Cayman Islands-based Riverstone Investments
Do you think it could be the weather that attracts these exemplary businesses to base themselves in the Western Caribbean or might it be something else? Rum? Deep sea fishing?
It’s a mystery isn’t it?
Exactly Refracktion, it is also interesting to note that
“The accounts show that Third Energy UK Gas Ltd employed 16 people in 2016. There were no figures for payments to directors because they were made by Third Energy Holdings Ltd. Its accounts are not available.”
and
“Tax paid: £0 (2015: £0, 2014: 0)”
Nice tax free work if you can fiddle it?
Phil, are you suggesting that a company that is making no income should be paying an income tax? Hmmmm
Peeny – don’t make yourself look sillier than you have to.
Peeny: “a company that is making no income”
Article: “Turnover was £757,000, up 76% on 2015, but still below the 2014 figure of £897,000.”
Hmmm. Maybe think before posting?
Refracktion, back to school for you. Revenue is not the same thing as income, my good man! I thought you were a businessperson!
What I am suggesting is that offshore companies set up a couple of parent companies that are licated in offshore tax havens. The only “British” arm pay the other parent offshore parent companies for “services” rendering the only possible taxable company in a perpetual state of debt so that they never pay tax.
Meanwhile the owning bank transfers money backwards and towards under an impenetrable secret cover between temporary post box companies and that enables all of them to retain a permanent tax free status.
Hey presto! The Inland Revenue get zilch and overpaid directors disappear into tax free black holes. Until another scam can be set up.
The result is the present “zombie company” plague that has financially ravaged the entire planet and has nor will ever have the least benefit to the unwilling host country.
That’s what I mean.
Phil C, the only issue with your proposed offshoring arbitrage is that it isn’t allowed under uk regulations. Ever hear of ring fencing rules?
Since when have any such rules been followed or even enforced? Its a private tax avoidance scam club. The so called rules that are not rules, are just surface noise to give illusion that such activities are even remotely managed, they are not, since it has to be proved, and proof is not available in secretive off shore tax havens.
If every parent set their children up as a limited trust company at birth and regained their stolen legal independence and sovereignty and then had all their tax matters in offshore tax havens, it would be quickly outlawed. But whilst it is the just the self aggrandised self serving corrupt few, such frauds on the tax payer will continue unregulated. Otherwise such tax free havens would simply not exist.
But those days are numbered, everyone knows it now, and there is going to be a reckoning, and for those who think themselves above or beyond the law, it will be very very hard.
You can’t pay tax when you’re not making a profit eh Phil mate? 😉
Ha! Ha!
( https://duckduckgo.com/?q=cat+that+barks+like+a+dog&t=h_&iax=videos&ia=videos&iai=UgIfcmDI9K4 )
Congrats, Refracktion, you’ve gone and done it. All of the companies are owned by a Cayman bossman who is determined to wipe out humanity and avoid taxes while doing it. You get the trophy today!
Best you’ve got Peeny?
Dash for Gas, crembrule? As far as on shore is concerned, as much dash as a tortoise carrying a tonne weight. Very much, slowly, slowly catchy monkey. Not sure that phraseology will recruit many new activists, especially in relation to a set of results which suggest that if there had been a Dash for Gas the revenue figure might have been somewhat greater?.
Martin as you will be well aware that was Dodgy Dave’s and Gideon’s phraseology.
Martin…. I think that was an indirect reference to the 2014 documentary on the Dash For Gas. Well worth a look:
Yes, of course I am aware of the background to the phrase, just pointing out that it is totally nonsense to use it in respect of UK fracking, or UK conventional on shore gas extraction. I can understand some do not want any UK on shore gas extraction, and I can understand why it is often suggested that alternative energy sources are constrained by huge investment diverted elsewhere, but the facts don’t fit to this situation.
Oops! Forgot where I was.
Martin
Yes, the dash for gas was a well used phrase when the coal mining industry was being shrunk.
The UK had Southern North Sea gas, which was not very profitable, and there was a merry flaring of vast volumes of associated gas from the Northern North Sea, as there was no market for it.
The dash for gas was the building of gas fired power stations to burn the flared gas or Southern North Sea gas, rather than continue with the eye watering amounts of subsidy to British Coal ( paid for from NSea oil revenue in some way ).
Hence we dashed for gas, and got there. Flaring reduced and the Southern North Sea got a new lease of life.
The recent dash for gas is more a dash for headlines, as no one is dashing to build more gas fired power stations and no one is flaring gas due to a lack of infrastructure ( in the UK ).
Ruth, have you any idea whether eventually Barclays Bank would suffer the losses incurred by Third Energy Gas UK, or can Third Energy Gas UK just go bankrupt and get the losses liquidated at no cost to Barclays?