Oil and gas explorer Apache North Sea has booked profits of $396.4m(£300.5m) for the 2016 year after taking $385.1m (£292m) in tax credits.
Apache notes the after-tax profit reflects changes made with the enactment of the 2016 Finance Bill, which saw the supplementary charge halved to 10 per cent and Petroleum Revenue Tax rate cut to zero from 1 January 2016.
As a result of these changes, Apache recorded a deferred tax benefit of $439m (£322.8m) from the remeasurement of its 2015 UK Deferred Income Tax Liability.
Apache notes revenue for the 2016 year was down 27 per cent to $654.3m (£495.1m).
Realised price per barrel of crude oil was down 17 per cent on 2015, averaging $43.11 a barrel, and production dropped to 15 million barrels of oil equivalent from 17 million barrels in 2015.
The group notes that excluding write-downs in 2015, operating profit was $69m (£52.2m) lower in 2016, reflecting lower production volumes and lower oil prices, which was partly offset by a $175m (£132.6m) reduction in operating costs.
On a statutory basis the group posted an operating profit of $22.8m(£17.2m) against a loss of $323.6m (£245.3m) the previous year.
Pre-tax profits for the 2016 year totalled $11.3m (£8.5m) against a pre-tax loss of $342.1m (£259.3m) in 2015.
However, tax credits totalling $385.1m (£291.8m) lifted overall profit for the year to 2016 year $396.4m (£300.5m).
Apache also booked an after-tax profit of $141.3m (£106.9m) for the 2015 year after receiving tax payments totalling $483.4m (£366.5m).
The group notes in accounts now with Companies House it drilled seven development wells in the Forties area last year, six of which were “productive”, down from 15 development wells drilled in the area in 2015, 12 of which were “productive”.
Capital spend in the 2016 year was cut to $95m, down from $322m in 2015, and the group forecasts capital spend in 2017 will be cut again to “approximately $80m” with current plans to drill four development wells at Forties.
Accounts filed for Apache North Sea Production Ltd for the 2016 year show profits almost doubled to £13m (2015: £6.6m) on revenues of £161.4m (2015: £135.7m).
Apache North Sea Production Ltd notes it employed 645 staff on average in the 2016 year, down from 679 in 2015.
Apache North Sea and Apache North Sea Production Ltd are subsidiaries of US-based Apache Corporation.
Petroleum Revenue Tax was introduced under the Oil Taxation Act 1975 to ensure “a fairer share of the profits for the nation” and was discontinued for fields which went into development after 1993.
The tax take from Petroleum Revenue Tax steadily declined from £2.56bn in the 2008/09 year to just £77m in 2015 and then a £503m deficit in the 2016 year to March after the abolition of Petroleum Revenue Tax was backdated to 1 January 2016.
In the 2016 Budget, then Chancellor George Osborne cut the supplementary tax rate oil and gas firms pay over and above corporation tax from 20 per cent to 10 per cent, having already cut the supplementary charge down to 30 per cent in the 2015 Budget.
Scotland’s geographical share of North Sea oil revenue fell into negative territory for the first time since records began in 2016 as oil companies took £338m more in tax refunds than tax generated.
Quarterly National Accounts Scotland figures released in May had shown the amount received in tax receipts fell to minus £338m last year and the geographical share of North Sea revenue was minus £172m, “reflecting the high level of Petroleum Revenue Tax refunds at the present time”.