The Australian mining company that owns Cuadrilla is back in profit, partly thanks to benefits from the UK tax system.
Four months ago, Cuadrilla described itself as “largely non-operational” because the moratorium on fracking in England had stopped work at its Preston New Road shale gas site in Lancashire.
Despite this, Cuadrilla was able to claim research and development tax credits in the UK.
In interim accounts for the six months to December 2020, the company’s owner, AJ Lucas, said:
“During the reporting period Cuadrilla became entitled to and received research and development (“R&D”) tax credits from the UK tax authorities. These credits delivered a $A3.0 million income tax benefit in the current year, and $A4.2 million in cash receipts during the period.”
The accounts show that AJ Lucas moved to a net profit of $A9.941m in the period, compared with a $A10.262m loss for the same time a year earlier. The 2020 profit included $A2.977m in income tax benefit.
Net cash from operating activities increased to $A20.559M, up from $A6.506M in the previous year. The increase included $A4.258m from the UK research development incentive, the accounts said.
Research and development tax relief is paid by the UK government to companies that work on what are described as “innovative science and technology projects”. It can be claimed on unsuccessful projects.
To qualify, companies must aim to create “an advance in the overall field”, not just their own business. There must be scientific or technological uncertainty about whether the project is possible.
Small and medium-sized enterprises, like Cuadrilla, with fewer than 500 staff, can deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal deduction, to make a total 230% deduction. They can also claim a tax credit if the company is making a loss.
AJ Lucas explained the improvement in its finances:
“Earnings from our Australian operations increased. Combined with a lower level of losses from our UK operations, a tax benefit arising from UK R&D credits as well as lower financing charges, the Group reported a net profit for the six months to December 2020 of $9.9 million compared to a $10.3 million loss in the corresponding prior period.”
Fracking, moratorium and net zero
The accounts also said AJ Lucas was working to end the moratorium on fracking in England. This has been in force since November 2019, following two periods of earthquakes caused by Cuadrilla’s fracks at Preston New Road.
AJ Lucas said it was seeking “to allay the UK Government’s concerns related to sub-surface induced seismicity”.
The company said Cuadrilla had demonstrated that its exploration licences, mainly across northern England, contained “a very large, high quality natural gas resource in underground shale rock”. But, it said, development of the licences had been delayed by moratorium.
It also suggested that geothermal energy and carbon capture and storage, required to meet the UK’s net zero emissions target, could use depleted hydrocarbon reservoirs. But this had “the same potential to cause induced seismic activity as hydraulic fracturing or geothermal fluid injection operations”, it said.
AJ Lucas added:
“resolving and lifting the moratorium on hydraulic fracturing should happen in parallel with defining and appropriately mitigating and regulating the risks of induced seismicity associated with comparable CO2 injection and onshore geothermal operations”.
It called for collaboration between operators of proposed near shore CO2 storage sites and the regulator, the Oil & Gas Authority on upgrading design, operation and regulatory controls for induced seismicity.
Cuadrilla’s data from Preston New Road and independent studies on the site would “be an excellent and world leading foundation for successfully completing this work”, AJ Lucas said.
The company said it was also exploring other conventional and renewable opportunities in the UK. Work was continuing to assess the geothermal potential of Cuadrilla’s onshore UK well stock:
“The potential of dual purposing shale wells to become geothermal energy producers at the end of their gas production phase is an exciting opportunity and one that again can support the UK in achieving its Net Zero CO2 target by 2050.”
DRILL OR DROP? 
So vague “promises” from the foriegn owned remaining dregs of “largely non-operational” Cuadrilla spontaneously convinces the UK government into ripping off the UK tax payer for “research and development (“R&D”)” tax credits?
Apologies for the copy and past quotes from the above report Paul and Ruth.
Are these anything more or less than the usual UK government rip offs from the UK tax payer? This time for “credits” delivered a $A3.0 million income tax benefit in the current year, and $A4.2 million in cash receipts during the period.” $A4.258m from the UK research development incentive?
“To qualify, companies must “aim to create” “an advance in the overall field”, not just their own business. There must be scientific or technological uncertainty about whether the project is possible.”
Isnt that an “aim to create” “an advance in the overall field” nothing but a massive tax payer subsidy for a foriegn owned corporation for mereely promises? The very subsidies that are denied at great length by the usual fossil fuel protagonists?
“Small and medium-sized enterprises, like Cuadrilla, with fewer than 500 staff, can deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal deduction, to make a total 230% deduction. They can also claim a tax credit if the company is making a loss.”
Which looks suspiciously like millions of pounds of UK tax payers rip off money for non existent speculative old dope doesnt it?
No evidence of any real world or real time “research and development (“R&D”)” other than unspecified “innovative science and technology projects” other than the “promise” that such “innovations” may even be possible or viable? The empty promise of which can be claimed even on on unsuccessful or non existent projects? Other than vague promises of course.
“It also suggested that geothermal energy and carbon capture and storage, required to meet the UK’s net zero emissions target, could use depleted hydrocarbon reservoirs. But this had “the same potential to cause induced seismic activity as hydraulic fracturing or geothermal fluid injection operations”, it said.”
AJ Lucas added:
“resolving and lifting the moratorium on hydraulic fracturing should happen in parallel with defining and appropriately mitigating and regulating the risks of induced seismicity associated with comparable CO2 injection and onshore geothermal operations”.
Therefore there is no incentive whatsoever on AJ Lucas to actually do anything “innovative” until a hydrocarbon reservoir is assessed to be “depleted”? And the results of any such “innovations” could cause precisely “the same potential to cause induced seismic activity as hydraulic fracturing or geothermal fluid injection operations” which caused the fracking moratorium in the first place?
Also, there is no indication of who assesses when, or how a hydrocarbon resevior is assessed to be “depleted” or verified to be in such a state by what method, be it scientific, financial or merely guesswork?
I suspect it would be far more advantageous for the UK tax payer to “aim to create an advance in the overall field” by refusing to deplete the UK tax payers “depleted” resources on anything so vague and unverified, particularly as it relies on whether “There must be scientific or technological uncertainty about whether the project is possible.” Or not?
“Money for nothing, cheques for free….”
Word count Paulus?
Another confusion regarding the UK tax system!
Interesting that all of a sudden the old cry of the company will go bust is replaced when the reality becomes clear. Neither correct, but what’s new.
Maybe the credits will be taken out of the £28 billion fuel duty currently paid out every year in the UK by the UK tax payer? Or maybe from road tax-that the EV owners do not have to pay currently? (subsidy alert!!)
Sorry you are confused Martin? Maybe the UK tax payer should be more concerned at the accelerating climate change, the sixth extermination event and 1 IN 5 deaths caused by pollution from fossil fuel vehicles not paying enough road tax for the priveledge of killing the planet?
Hmm….that cracked mirror is refecting the real polluter again isnt it?
No, to your first question.
Your maybe question did not preclude those travelling to PNR to protest, including those foreign investors in their 3 litre BMW diesels, or those who posted where to park near to PNR to attend the various jollies. (Some even questioned why those who were not antis were not gathering to host their own jollies. Maybe, they were just being more responsible?)
Antis being cheered on and excited that their activities would put Cuadrilla out of business! What happened to that? So, now we have it’s shameful that that did not happen, when the reality is it is shameful that some wanted to excite others with false promises!
Yes to my first consolations to your own admitted confusion regarding the UK tax system. No change there amongst so many other similar past declarations of confusion and misunderstanding.
Oh Dear! You still winging and whining on about nothing Martin?
More likely that, rather than the odd claims of x-ray vision, apparently claiming to “see” or “know” of specifically configured vehicles and their cubic capacity from? From what? Or regarding any specific transport configuration of any vehicle at all at any location not within immediate visual range without lifting the bonnet or examining the registration? That its more likely a result of a fevered and excitedly speculative imagination? Not the real world at all? Particularly not in any way a result of proof or substantiated source or facts?
Links? Proof of claims? Identification of people and registration details of vehicles?
No? None? Nothing at all then? Your claim must therefore be classes as just “excited speculation” then isn’t it.
But of course the entire “contribution” of yours just indicates of a diversion attempt from the real world subject heading into? God knows where? As im sure it is intended to do? Just to say anything at all?
But lets look at some real world issues that arise shall we? At least something substantial can be rescued from the “contribution” above…..
As to Cuadrillas demise and failure, followed by their “largely non-operational” status. And the eventual buy out by the foreign Australian corporation, AJ Lucas. Was a combination of many things.
1. Cuadrillas own arrogance and operational incompetence and inability to correctly interpret the results of their own seismic surveys, or perhaps their unwillingness to admit that the expected effects of their fracking operations would cause earthquakes.
They just went ahead and hoped it wouldn’t happen without warning anyone.
Not to the local population and not to the governments own regulatory bodies.
Those government bodies incidentally, were exposed right here on Drill or Drop, to be underfunded, incorporating staff from petro chemical industry interests and subsequently operationally compromised. Ineffectual in scope and without the adequate legal “teeth” to enforce anything but a “strongly worded letter” of reproach, in the event of accident, deliberate and substantiated contravention of the regulations, or just plain operational incompetence.
2. The actions of the multiple countrywide protests which caused the UK public and eminent scientists to begin to question the validity of the arrogant spin which underpinned in particular Cuadrillas operational competence and intentions.
3. The resulting public outrage from the increasingly publicised protest camps and Cuadrillas attempts to shut down protest via an increasingly violent over populated police presence.
4. Those very public activities both preceded and followed the earthquakes that resulted from Cuadrillas fracking attempts which eventually led to the fracking moratorium. Without the protests and public outcry there would have been no such moratorium. The government would have just looked the other way, just as they had on all previous incompetence by other fracking operations.
5. And then of course the deliberate refusal to admit responsibility for the damage caused by Cuadrillas fracking resulting from a far too complex multiple and heavily faulted substrata, which was warned about by other scientists and experts in seismicity, and from their own seismic testing informed them of the likely results of fracking, if they had bothered to look or admit to.
The rest of what you say merely descends down the usual slippery slide into those oddly obsessive fixated delusions that seem to dominate your “contributions” when you have nothing relevant to say, maybe you should keep to the subject?
That was fun!
Always a pleasure.
Have a nice day!
What nonsense, rather than fun.
The moratorium was due to the seismic events. Nothing else.
Indeed, if the protests had not delayed that happening, then the moratorium would have happened EARLIER!
So, Cuadrilla was not forced out of business, and the eventual moratorium was DELAYED by the antis.
A great success!
The “we played some lovely stuff” whilst being relegated, routine. The manager’s (and now the antis) excuse but irrelevant to everyone else.
What is irrelevant to you, PhilC, could just be relevant to many others. [Edited by moderator]
MARTIN ,
Please apply some common sense here . This really is a NO BRAINER .
Let Jack help you .
If the people of the area were happy to sit back and allow these seismic events to continue ….. Cuadrilla would still NOW be Fracking.
The will of the people , good respectful pillars of the community standing together, shoulder to shoulder and firmly saying NO, is what eventually helped shape government policy in bringing an end to Fracking.
It’s reassuring to know that the government and indeed all other political parties are listening to the people on this matter and they are also taking note of the serious implications of Fracking and climate change .
You have got it bad havent you? So now you are amitting to nonsense too Martin? Figures. The old Balcombe blues perhaps?
No, you are completely wrong about Cuadrilla Martin. Are you still digging Cuadrillas grave? The funeral ended long ago? Everyones gone home…..
All thats left is the FrackenLucas monster stitched together from Cuadrillas rotting remains to suck the life out of the depleted reservoir of the tax payer….
This is all getting a little boring isnt it? That odd obsessive fixated prevarication and diversion from the subject again isnt it? Give it a rest old thing. All bad things come to an end you know.
And still nothing about the subject:- “UK tax benefits boost finances of Cuadrilla’s Australian owner” (just to remind you)
Never mind, cheer up, give it a rest and…..
Enjoy!
Enjoy!
Oh yes, the reminder!
So, Cuadrilla have not been forced into bankruptcy? I happen to believe that is the reality that the tax benefits show quite clearly. Yet, I also remember all those pocket economists with their one sided equations trying to justify their activities with claims they would achieve just that! (And not just for Cuadrilla, but a number of other companies as well, with no success.)
Nope, they didn’t.
Then there was a moratorium after seismic events were triggered, which would have happened earlier without the delays sought by the same individuals! Now, that really is rather humorous.
So, history will record the team failed miserably, because that is what history does. The team can meet up now and again and continue to blame the ref., the opposition or the governing body, and that they won matches they lost but the record will stand. The members of the team can produce fake CVs but the record will still stand.
jP may still not understand about how companies can obtain R&D benefits, others might. Others may also know that if a company wants to maximise such benefits then all they need to do is work “climate change” into their projects and, kerching, they hit the Holy Grail. Referencing depleted tax payers may not be too wise with that going on, especially as the PNR policing costs are also recorded.
Enjoy!
Ha! Ha! You are a one Martin! I’m not sure what you are a one of, but a one, none the less. Its like an overwound mechanical toy isnt it? Just runs around damaging the furniture, running over everyones toes and frightening the dog. No change there.
[Edited by moderator]
OK! Who were these “individuals” you insist on defaming without them being here to defend themselves and put you in your place.
And for that matter what were they driving? Supply their names and vehicle makes and models, cubic capacity and registrations. Supply substantiated verification, links and references will also be necessary.
Otherwise your claim of unspecified “delay” in the fracking moratorium, could be termed as merely “excited speculation” couldnt it?
Or is that another one of those obsessive fixated fantasy delusions that we see so much of in your “contributions”? Or perhaps that was a Cuadrilla or a government fantasy? Like the claims that sought to persuade everyone that fracking was “perfectly safe”? Who were the government spokespersons at the time, and where are they now?
Oops!
And. Yes, a very timely reminder, certainly, but the intention was for you to actually say something relevant and rational to the subject of the Drill or Drop heading. You almost got there, but fell at the first hurdle…”nurdle”? Never mind, keep trying, you know what they say, practice makes…..well…..it makes something anyway?
Have a nice day!
Always a pleasure!
And….
Wait for it!
Wait for it!
Enjoy!
Enjoy!
Meanwhile, back in the real world subject matter. It will be interesting to see if (or when) more fossil fuel corporations seek to claim this government sponsored rip off money from the tax payer, and claim en mass, their “research and development (“R&D”)” tax credits”?
And will we see the fossil fuel industry mob handedly squabble to be first in the queque, hat thrust in hand, queueing up for their free handouts from the government promoted free, zero interest, no repayment necessary cash desk?
I suspect there will be “kerchings!” resounding throughout the darkening portals of the slowly deflating depleted tax payer reservoir of the government open coffers?
Meanwhile as the remaining UK populace lose their jobs.
Who cant afford to feed themselves or their children.
Who are being forced into bankruptcy and poverty.
Who are in danger of being made homeless at the whim of the government who can pull the moratorium plug on evictions at any time they wish.
Who are Children and adults who see no way out of this trap and are committing suicide en masse.
Who are suffering from minimal financial support for a situation they are not responsible for, and yet get handed no millions of pounds for doing Research and Development in any subject, even for R&D in surviving the pandemic.
And this government give away of millions of tax payers money for free to the fossil fuel industry, with no conditions or interest, or of expectations of repayment at any date, or of any actual R&D or indeed any indication of anything at all. other than some vague promise of vague unsubstantiated tomorrow and tomorrow and tomorrow promises.
Just so long as the claiments say they are carrying out “research and development (“R&D”)” at some future time never, or when some unspecified location of a hydrocarbon reservoir is deemed “depleted” by who knows who, when, and by what method or opinion is equally unspecified or fixed in time and space.
Those multiple millions of pounds of tax payers money should have gone towards supporting the very same UK citizen tax payer that is being royally ripped off by these open cash till government give away artists.
Where was the Parliamentary debate on this blatant free open ended give away?
Where was the outrage at the government subsidising the fossil fuel industry when the real world need for those funds is all of us who are staring them in the face and demanding public accountability of all government financial machinations?
I said before its well past time when the people of this country examine just what is going on in the incestuous fossil fuel industry/government relationship.
Have a nice afternoon.
Always a pleasure!
Enjoy!
Enjoy!
[Typo corrected at poster’s request]
You do assume a lot, PhilC! And then rely upon Paul to cloak your incorrect assumptions.
How do you know the individuals are not “here to defend themselves”??
Last time I looked there were around 1600 registered on this site. Most of them would be individuals-I would hope. Maybe they do not wish to defend themselves, for their own reasons, or they actually agree with me? I think I will assume they are all, but one, within the last category.
Why the need to attempt to create a false narrative to try and get your points across?
Oh yes, I remember. “I won the election”. “We wouldn’t have been relegated.” A regular theme, but incorrect.
And now, back to tax credits, there are now Super Deductions to enjoy!
That should offer a few, bigger, opportunities. And, of course, such benefits are NOT limited to a particular industrial sector, even though some would attempt to imply there are. And all those benefits regarding R&D are NOT given away without the claimant being able to show they qualify, usually with a pre-submission and then validation that it has occurred. That is the reality, no need for assumptions.
Dear me! What yet another display? Toys out of the pram time again is it?
“And all those benefits regarding R&D are NOT given away without the claimant being able to show they qualify, usually with a pre-submission and then validation that it has occurred. That is the reality, no need for assumptions.”
No Martin, the Drill or Drop text above proves that is not the case. No one can validate vague promises. No actual R&D is being done, only the vague promise of it as and when they please.
Perhaps you could show everyone the proof of that “assumption”? Just like the proof of all those individuals names and vehicular specifications and registrations you go on and on about, but can never actually supply any proof of your assumptions? Where is that?
And then, there are these bizarre and blatant assumptions:-
“Last time I looked there were around 1600 registered on this site. Most of them would be individuals-I would hope. Maybe they do not wish to defend themselves, for their own reasons, or they actually agree with me? I think I will “assume” they are all, but one, within the last category.”
Oops!
So your “contribution” is in itself an assumption isn’t it. Its a circular assumption to boot too isn’t it. An assumption of an assumption. A never ending spiral, finally disappearing….where? Somewhere best not specified in polite company.
Me thinks, he doth assume (and protest) too much?
So no Martin. I make no assumptions. I merely question and point out the possibilities and even the probability of further attempts by the fossil fuel industry to latch onto the exposed government opened tax payers depleted reservoir of tax payers money. To effectively help their greedy artificial person corporate selves to natural living persons hard earned tax payers money they contributed in good faith to this incestuous corporate/government relationship. That’s not an assumption. That is fact.
That money should really go to the very real tax payers who desperately need their own tax paid money to support them through this worst recession in recorded history. For the very reasons I listed above.
People are dying because of lack of money. Food kitchens are overwhelmed. I know. I deliver food there all the time. Real hard working people who have worked hard all their lives to make a living to feed themselves and their children. And who now find themselves unable to do so by causes not of their making. Its heartbraking to see. You should go and visit and contribute something worthwile there. It may just alter your view on everything.
Does that not matter to you? Just so long as the fossil fuel corporations get their snouts in the open government give away free tax payers trough first, is it?
All the rest of your post is just the usual waste of everyone’s time and space. And anything you want to say to Paul at Drill or Drop is….well….that would be an assumption wouldn’t it?
Have a nice day tomorrow!
Always a pleasure.
You know the rest…..
Quote: ‘Research and development tax relief is paid by the UK government to companies that work on what are described as “innovative science and technology projects”…There must be scientific or technological uncertainty about whether the project is possible.’ Yet UKOOG claim on their website that: ‘Onshore drilling and hydraulic fracturing (fracking) are established techniques.’ Obviously the usual standard of fracking doublespeak applies.
Cuadrilla’s original statement on their website read,
‘Members of Cuadrilla’s management team have each played leading roles in the drilling and/or hydraulic fracturing of more than 3,000 natural gas and oil wells across the world.’
Now they claim they are R and D.
Best hand back their PEDL then and let someone with the relevant experience buy it. PEDL’s are issued with time constraints to make sure there is maximum benefit for the country.
In the unlikely event Cuadrilla try again the planners will have to consider if an R and D company could realistically produce any material benefits.
from a business perspective the government sold cuadrilla a Licence to explore for shale gas. then after the company had spent millions of £ on the project the Force them to stop with a moratorium. And you think its the company ripping the Tax payer off. what a narrow minded view. The government Actively Encouraged these firms. So in my view they should be compensated or Allowed to carry on the Ball is in the governments court. But as one of the Tax payers I am questioning why its now costing me a fortune to keep warm when were all sat on millions of cubic meters of shale Gas.