"A rebound in North Sea oil is imminent"

According to Kaylie Pferten, Labour's green energy policy is unsustainable

This is encouraging for British oil explorers.

Slowly, Ed Miliband's utopias of clean energy and climate justice are coming to light. The green delusion of the secretary of state for energy security and net zero will be dropped. An economy must use more energy, not less, if it is to expand. In addition to being too costly and unreliable, wind and solar energy also harm the environment and leave a carbon footprint. Because offshore wind farms are killing so many birds, the government has already promised to paint them in a negative light.

Gas and oil won't be replaced by offshore wind. Fossil fuels are still a more dependable, superior, affordable, and clean energy source. Unnecessarily high energy costs are unaffordable for a nation that is already heavily taxed, living well beyond its means, and can only be saved by growth.

The cost of net zero is one of the primary points of contention for the Reform party. To blunt the Reform weapon, Labour simply needs to let Miliband go, which is inevitable anyhow, and further abandon the left of its party, a process that is already halfway done, just as the Tories abandoned the right.

The aforementioned serves as an introduction to my primary point for the day. Oil and gas from the North Sea will make a resurgence. The economic and political realities dictate that it is unavoidable. If not, the country's finances and the Labour government will vanish. Politicians prioritize power over zeal, whether it be green or not.

There will be no more restrictions on new North Sea oil and gas licenses. To encourage activity, North Sea oil companies will pay less in taxes (currently, the effective rate is 78 percent). Are lawmakers insane? And every company whose operations and market values were destroyed by this esoteric religion will return. Some will multiply numerous times. Therefore, it might be time to purchase North Sea oil and gas companies soon. Here are my opinions on the major players in North Sea oil and gas, but which ones?

Where to look for North Sea oil investments right now.

The largest independent oil and gas company listed in London is Harbour Energy (LSE: HBR), with 90% of its operations focused on the United Kingdom. Harbour's yield is 11% and its market value is £2.06 billion. Harbour had to restructure after being hammered during COVID, when oil went negative. The stock was hit once more when the Conservatives imposed a 38 percent windfall tax following Russia's invasion of Ukraine, and once more after it declared an annual loss despite a 40 percent increase in production.

Then, as oil prices continued to decline, the shares fell even further, adding to the market's outburst over Trump's tariffs. A 108 percent effective tax rate, up from 93 percent in 2023, was reflected in Harbour's post-tax loss. This company's fortunes will be changed by a simple change in legislation, but even if this is an exaggerationand I'm not totally sure it iswhat's the point of conducting business in these conditions? For the reasons mentioned above, I believe it will happen, but you can wait a long time if you're betting on legislative changes.

Leading North Sea oil and gas producer Ithaca Energy (LSE: ITH) is owned by Israelis. With 37 North Sea operations that it has expanded through acquisitions, it has a market capitalization of £2.03 billion and is protected against changes in the price of oil. It has a yield of 12%.

Serica Energy (Aim: SQZ), which is listed on Aim, has a market value of 600 million and a yield of 13 percent. It provides 5% of the gas produced in Britain. Although a merger with EnQuest was originally planned, the closing date for that agreement has been postponed once more. EnQuest (LSE: ENQ), which has a market valuation of 230 million, also produces some goods in Malaysia. It is a reliable mid-tier producer with a yield of 5% and a production rate of 41,000 barrels of oil equivalent per day (BOEPD). At the moment, the stock is valued as if the Serica deal would never happen. The North Sea has a lot of leverage for Kistos (Aim: KIST). A short time ago, this stock, which has a market capitalization of 115 million, was trading at five times its current price. For the loss of profits, its shareholders ought to sue the government.

The tiddlers are now discussed, with Jersey Oil and Gas (Aim: JOG) coming first. The 40 million market-cap explorer has between £5 million and £10 million in funding. While not the most affordable, it is also not the riskiest tiddler. This year, it has more than doubled, indicating that someone is doing something correctly.

Just £9 million is the market capitalization of Orcadian Energy (Aim: ORCA). Although they haven't produced any oil yet, this North Sea developer intends to this year. Due to Reabold Resources' (Aim: RBD) 4.8 million "tiny cap" and lack of funds, the stock is extremely susceptible to dilution. It has a deal with Italy that could change its luck. In 2007, this stock was worth 475p, and in 2021, it was worth 80p. The current price is 0.04p. What comes nexta price doubling or a 99 percent drop?

Deltic Energy (Aim: DELT) comes next. Despite having three licenses and a market value of 6.5 million, this North Sea explorer has not seen any revenue growth. This year, it has increased by over 50%. However, in 2021, this 7p stock was worth 80p. Although the Selene gas project is regarded as a high-quality asset, it is very risky. Raising money without erasing current shareholders is a difficult task.

Of these stocks, Harbour appears to be the best investment. It gives you a yield that reduces your risk and rewards you for keeping it. I own it, and so far, I've only lost 25%. If laws change, the stock price could skyrocket.

The Flying Frisby is a newsletter for investors that Kaylie Pferten writes.