Angus Energy Share Discussion Threads

[jtidsbadly] 10/3/2021 18:39

...I should perhaps have added that, in a winding-up, and in the absence of secured creditors (the Knowe convertible is unsecured), employees’ wages are at the very front of the queue.

[jtidsbadly] 10/3/2021 18:19

I’ve had a look at the 2019 and the 2020 accounts together. When I referred in posts over the past few weeks to the likelihood of a qualified audit report, I used the wrong technical term. A “material uncertainty as to going concern status” is far more serious than a qualification, and is in essence - though not in name - what I was predicting.

It seems to me very likely that the timing of the very recent, sudden discovery of the viability of Brockham and Lidsey was caused by a realisation that without it, full de-commissioning reserving would have been required for these “assets”. This would have put the accounts in a far worse light, just ahead of the final stages of the loan documentation. As it is, they appear to have added back to cash the “ring-fenced reserves” applied earlier to these two properties.

The “material uncertainty” also needs to be considered in tandem with the “Key Audit Factors”, which detail the factors in the accounts which may have a critical effect on the company - and on which the auditors offer no opinion. This largely discredited management is responsible for assessing these factors.

In addition, those salary increases were in effect in 2020. There’s no telling what they’re paying themselves now. A separate AGM vote on Directors’ salaries etc. is not required in AIM companies. The only way to object, it seems to me, is to vote against the adoption of the Report and Accounts. However, this would either have no effect, or would tend to speed the company’s demise. Shareholders are going to have to hold their noses and swallow all this unpalatable medicine.

[jtidsbadly] 09/3/2021 18:03

Thanks, HITS. The title appears but not the text. Must be my iPad then - it’s getting old.

I think they’re close to chucking in the towel. Middle of April, I should think, if they can get that far. Who’s going to lend them the money? They’ve got no security other than Poundland, about whose value the less said the better, and the cash flow estimates are all based on data they themselves provided to the authors of the CPR. All their estimates so far have been wide of the mark. So how can you pay those any credence? And gas production is going to be really late, even with the money. Anguish is strapped already, and the Directors have protected their incomes against a winding-up. They can't issue more equity before early April. Even then, with the likely erosion of the share price in the absence of a loan between now and then, it’s going to be a struggle to raise enough to last very long. Presumably they took the risk of releasing the accounts before June because they think they might be able to prime the share price for a placing in early April. I suppose there's a chance of that but it appears a slim one, doesn’t it?

If I held shares in this, I’d vote against acceptance of the report and accounts.

[clottedq] 09/3/2021 17:43

Well,

If we didn't already think this was a lifestyle AIM company, it sure as Hell is now!

With those "completely unjustified" salary increases, Anguish BOD have blatantly set out their stall to milk what's left of the company coffers dry IMHO.

Greedy beyond belief!

CQ ;-)

[headinthesand] 09/3/2021 17:37

JTids, if you go to the Anguish website itself, select Financial Reporting under the Media (why media? anyways...) dropdown. The page that opens allows you to select the year 2020, under which you will find the nice and shiny FY 2019 Annual Report, including the independent auditor's statement therein (pages 34 to 39).

[headinthesand] 09/3/2021 16:55

What's depressingly familiar is ANGS' primary school level command of arithmetic.

Looking at page 29 of the nice and shiny Annual Report pdf now hosted on the ANGS website, we see the directors' healthily bumped up salaries laid out individually.

Georgie up to £120k, Hollis and Fernandes likewise up to £120k each, Buchanan up to £30k, but Paddy down to £60k (maybe he committed some dire social faux pas, like passing the port to the wrong side at a board meeting? Perhaps he forgot himself, owing to laughing uncontrollably at this latest piece of bare-faced larceny perpetrated against shareholders? Anyhow...)

ANGS helpfully provides a total of these salaries in their shiny pdf. But as is typical in Angusworld, they've managed to make £120k + £120k + £120k + £60k + £30k come to... wait for it... £415k. BZZZT!

They're consistently rather good at claiming costs are markedly on the lower side of what they in reality are, n'est-ce pas?

Anyhow, going with the correct £450k combined total, that's actually a combined directors' wage bill annual increase of over 52%, rather than the mere 40% previously reported, which was based on their kindergarten sums.

Nice work if you can get it, what?

[jtidsbadly] 09/3/2021 15:54

This is good stuff:

“Remuneration policy
The objective of the proposed remuneration policy is to attract, retain and motivate high caliber executives to deliver outstanding shareholder returns and at the same time maintain an appropriate compensation balance with the other employees of the Group.”

Hollow laughs all round, what?

[jtidsbadly] 09/3/2021 13:33

The Directors, three of whom now earn £120,000 p.a., one £60,000, are on 12-month contracts. There’s not going to be much left for shareholders, is there? These terms were the same in the 2019 report and accounts, though the actual sums were much different. In the 2018 accounts, the Directors’ Remuneration Report is referred to in the text but I can’t find it. The terms of these contracts include only salary and benefits, so share-based payments, by which the interim MD was paid an extra £10,000 in 2019, have now been consolidated in much-increased salaries and will be payable for another 12 months if Anguish disappears up its rear end. Another nice encouragement for shareholders, what? Bumpers all round. Absolutely. Good show.

[jtidsbadly] 09/3/2021 11:45

JA51: that’s very funny! Is this where Ocelot works?

[jtidsbadly] 09/3/2021 11:29

Tax loss shell, anyone?

[ja51oiler] 09/3/2021 11:25

Seems The nominated advisor shares the same address as Angus now....Must get very crowded in there? Good job Wingas Storage moved out isnt it!!

[jtidsbadly] 09/3/2021 10:58

..and if I were Ocelot’s employer, I’d be telling her to stop. If there’s an inquiry here in due course and she’s found to be working in PR on Anguish’s behalf, her employer could get into hot water.

[jtidsbadly] 09/3/2021 10:49

HITS: they’re just staging a smash and grab on the remaining cash while the going’s good, surely? I suspect they know the game is up and have calculated that this is as much as they can get away with.

[headinthesand] 09/3/2021 10:41

Yep, looks like the already too small decommissioning piggybank has been quietly removed. A tad worrying as a company policy, since other abandonment costs on at least 2 of the 4 wells due to be decommissioned at Poundland are still entirely unknown? I'm not sure the OGA will look too kindly on such a bare-faced redeployment of reserves...

Separately and as I have commented next door, the remaining sitting directors have decided to award themselves in total an eye-popping 40% average annual payrise. Georgie Porgie got within a cats whisker of a 50% pay hike and Hollis and Fernandes saw their annual pay literally double. Even Buchanan got a 15% raise. Obviously because they've all done such a masterful job over the last year of delivering value to shareholders?

[jtidsbadly] 09/3/2021 10:39

JA51: they say in different places that they had 9 and 11 employees, including Directors. I can’t make the salary numbers add up (there’s got to be a simple explanation).

Paddy’s past tenure (until April last year, when the Administrator was appointed) as Non-Exec. Director and Chairman of the Audit Committee at NMC seems to have been redacted! Good fun, isn’t it?

Re Lidsey, they seem to have made quite a big financial loss on their limited production there. Presumably that reflects the price of tankers to take water to the north-east?

All the above is irrelevant though. The critical consideration is the management’s own admission about the £12mm. loan as it affects Anguish as a going concern. They’re not going to get it going this year, are they? Look at their statement in the Q&A and compare it with this (below). I make no apology for repeating it:


“As noted above, in the event that the Group is not successful in concluding the debt financing arrangements, there would exist a material uncertainty that may cast doubt regarding the Group's ability to continue as a going concern and therefore, it might be required to raise additional funding to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the report.”

Realise its assets and extinguish its liabilities. And raise more cash to do so. Good luck with that, then. Am I right in thinking that this form of words equates to a warning that they may need to wind up the company?

[ja51oiler] 09/3/2021 10:18

Seem to be a fair few inconsistencies in here don't there.

Do you think Paddy should have edited his part? Obviously, he wrote this pre-Brockham decision?

Apparently, Lindsey is producing Again. The levels must be so low as to be not worth reporting to the OGA then as they are showing production as Zero.

I can't recall seeing an RNS telling us that Brockham had received FDP approval either?
Seems the OGA aren't aware of this as they are still showing the license runs out on the 27th of this month!

[jtidsbadly] 09/3/2021 10:09

Sorry, the long term trade/other payable is the Knowe convertible. The increase in the short term payables is a net £500,000, give or take. I imagine that’s either prepayments for kit or for the pipeline works. The £900,000 ring-fenced impairment charge was announced after the 2019 accounts, so there’s no change in the balance sheet figure for this, they’ve just quietly dropped the commitment.

They could with advantage have spent another £100 or so on a proof reader. The report is peppered with errors.

The Directors are basing their going concern opinion on cash flows offsetting losses by the end of 2021. It’s not going to happen, is it?

[clottedq] 09/3/2021 10:07

So to summarize:

They've raided the piggy bank (decommissioning funds jar) to continue paying for salaries and on-going operational costs whilst they plead with Aleph to bail them out with a loan larger than their current market cap...

Anyone who "STILL" believes Anguish can pull their - first ever - success out of this gaping financial black hole is insane IMHO. You would get better odds investing with a prince from Nigeria!

CQ ;-)

[jtidsbadly] 09/3/2021 09:56

JA51, chickndinner: yes, ring fenced de-commissioning funds of £900,000 seem to have disappeared. The residents of Brockham and Lidsey will be pleased.

In addition, they seem to have shifted expenditure into the current year. Long term trade payables is a substantial number. That may explain the big improvement in cash outflows!

Why do the salary figures not add up?

These extracts seem interesting (sorry to be so wordy):

“The Committee has reviewed the carrying values of the Groups oil assets, comprised of the oil production assets, exploration and evaluation (E&E) assets. Based on the work performed during the audit, and through discussions with management, the committee considers that the carrying value of E&E assets are not impaired. The committee have considerate prudent not to impair the oil production assets based on the estimated oil reserves and forecast level of future production.”

“As noted above, in the event that the Group is not successful in concluding the debt financing arrangements, there would exist a material uncertainty that may cast doubt regarding the Group's ability to continue as a going concern and therefore, it might be required to raise additional funding to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the report.”

[chickndinner] 09/3/2021 09:45

JA. Not after any recognition but I believe I was the 1st to question if they were dipping into any ring fenced funds?

[ja51oiler] 09/3/2021 09:35

Looks like your suspicion was correct JT.
Those ring-fenced De-comm funds seem to have been shifted around, haven't they?
Looks like they now think they are assets???