Angus Energy Share Discussion Threads

[ultimatejustice9] 21/9/2021 14:09

Imo the side track is pretty straightforward, We have a normal window which will be milled through the 9-5/8 intermediate casing and whipstock a d anchor is used to exit and drill new formation at angle away from the original well bore. As long as distance is kept from original wellbore and new wellbore conditions are fine with no hole issues , there are really no dangers in sidetracking.

[ultimatejustice9] 21/9/2021 14:07

The Geothermal rainbows are merely a distraction as is Brockham and Lidsey whuch are dead in the water and it's about time they informed market about the Balcombe (non?)appeal---Its part of the business plan. However I do agree that the focus must be the gas given the unprecedented gas prices. Anything else is a distraction

[ultimatejustice9] 21/9/2021 14:06

It all presumably depends on the penalties that may come to bear under the hedge versus the bluebird extra margin that would be available---we are not going yet, that's quite a negative view point.

[ultimatejustice9] 21/9/2021 14:05

If they know they need a sidetrack to be able to have a chance of fulfilling contracted-to hedge commitments - depends on what has been signed up. If its 70% of total production then we might see first gas first

[ultimatejustice9] 21/9/2021 14:03

cannot be drilled while any production is taking place-- It can be drilled but it's much more complex

[1347] 21/9/2021 13:07

HITS Yes the part time MD with no Oil & Gas experience seems to have painted himself into a corner. If they are going to do the side track before the processing plant (which is what I would do, given the delays to that) they'd need to have that rig available quite soon and there is no sign of it thus far.

[headinthesand] 21/9/2021 12:51

1347, yes you'd think so, but...

A sidetrack takes (I believe) 16 weeks from start to finish - and cannot be drilled while any production is taking place.

So that would seem to make it a rock and a hard place situation for ANGS, as I have commented before.

If they know they need a sidetrack to be able to have a chance of fulfilling contracted-to hedge commitments, there's pretty much no good time to start on that. What do they do? Rush to first gas (and sure, why weren't they anyway? What was the point of any of the ridiculous distractions you've quite correctly listed above?) and make hay while the sun shortly shines, while inevitably then falling short of committed to hedge production? Or miss out on that short-term chance and get the sidetrack drilled as immediately as possible?

It all presumably depends on the penalties that may come to bear under the hedge versus the bluebird extra margin that would be available. I'll be interested to see which way ANGS jumps on this.

[sincero1] 21/9/2021 11:58

strange - yesterday the resident window licker grey brigade were absent but old grey window lickers were sitting blocking the m25 ... today no old grey window lickers sitting on the m25 blocking it but the resident window licker grey brigade are posting negativity here.... coincidence ?

[1347] 21/9/2021 11:41

They need to flow gas as soon as possible at what rate they can get to take advantage of the high prices, which means deferring the side track until after the hedges kick in to ensure they then have sufficient volume not to come a cropper. I note that there has been no indication that a drilling rig has been booked yet anyway and they tend not be sat waiting for a phone call. The constraint therefore will be the procesing plant, which means the EA approval is now on the critical path and they can take ages. The Geothermal rainbows are merely a distraction as is Brockham and Lidsey whuch are dead in the water and it's about time they informed market about the Balcombe (non?)appeal.

[ultimatejustice9] 21/9/2021 10:48

I only know of hedges that commit to a fixed in advance volume (of any tradeable commodity) at a fixed in advance price over a fixed in advance period of time.----Can you name one please as I have never seen it done like that.

[headinthesand] 21/9/2021 10:34

I only know of hedges that commit to a fixed in advance volume (of any tradeable commodity) at a fixed in advance price over a fixed in advance period of time.

So, if George has committed say to selling 3.5 mmscfd of gas over a three year period at 43p per therm (that being 70% of the much bandied about out-of-date CPR-based estimate of 5 mmscfd)...

...but Poundland sans sidetrack can only produce 2.4 mmscfd (which I believe is the average output reported by the OGA during the last months of the field most recently being in production)...

...then there are quite possibly not happy times ahead.

This meshes with the otherwise extraordinary murmurings that have emerged from ANGS regarding delaying first gas even further by drilling the sidetrack up front - "extraordinary" because doing so would instantly and unavoidably add an additional 16 week delay to production start. TBF, they've not 100% confirmed that this is what they'll do - but they've sure mentioned it a lot.

Which makes me suspect that doing so - and successfully - is probably crucial, in order to avoid getting crucified by the hedge they signed up to. Whyever else would such a thing be even mentioned, given current gas prices? It'd be insane...

[ultimatejustice9] 21/9/2021 10:25

But that type of arrangement would not be beneficial for the finance. If they were over a barrel surely they would want 70% of total production

[jtidsbadly] 21/9/2021 10:20

UJ: they were over a barrel.

[ultimatejustice9] 21/9/2021 10:17

I do, but why would the finance sign up to that ? If the flow is higher they would miss out on that. That would.seem a very conservative arrangement considering they have out down 12m? Do you know of another hedge set up like this ?

[headinthesand] 21/9/2021 10:11

JTids, precisely. It's the usage of "approximately" and "estimated". UJ9, surely you see that must mean a fixed volume... or why would those words even need to be used?

If the hedge was purely percentage of production based and thus variable volumetrically speaking (leaving aside that I don't believe such a variable quantity hedge contract would even exist), the wording would have simply stated 70%. No need to put any caveats or conditionals around that.

However, if this is a fixed volumetric hedge (which it pretty obviously must be), then it's the volume that's fixed and thus it's the percentage of production that inevitably becomes subject to variation and estimate.

Gettit?

[ultimatejustice9] 21/9/2021 09:40

We probably won’t know the form the hedges take before the next annual Accounts--Agree

I wouldn’t expect the part-time Interim MD to divulge these details before he has to, would you?---It would be useful but I take your point on this

the wording of His Lordship’s statement very strongly suggests that they have negotiated these contracts with a fixed volume of gas, albeit conservatively estimated.-----Can you show me where. I don't believe a serious finance company would hand over 12m on these terms even being conservative. Can you think of another example of this? I can't think of any other finance agreement done this way. If the flow was significantly more than anticipates then the finance co would miss out. I can't see that tbh.

If it fails, the shareholders of Anguish will have financed a decent part of finishing the project with their very generous support over the past two years.-----Thats the name of the game. 90% of Aim is funded this way

[jtidsbadly] 21/9/2021 09:32

.... so they need, desperately, to achieve lots of gas from a successful and timely sidetrack.

As for the motivation of the Lenders, perhaps they had a view on gas prices and on the current apparent shortage of storage capacity in England. Or perhaps they fancy it for hydrogen storage. Who knows? As it is, they’re getting a very healthy return on their investment in the event that Poundland succeeds. If it fails, the shareholders of Anguish will have financed a decent part of finishing the project with their very generous support over the past two years. Leaving the Lenders with an asset that they’ll have acquired more cheaply than they would have managed under any other scheme, what?

[jtidsbadly] 21/9/2021 09:25

We probably won’t know the form the hedges take before the next annual Accounts, which should be in April. This is because options, while expensive to buy, do not need to be marked to market, while forwards and futures do. I wouldn’t expect the part-time Interim MD to divulge these details before he has to, would you? Unless, of course, they’re options. I’d like to see an investor question on the matter though.

UJ: if the hedges are futures or forward contracts, the losses they’d make on a shortfall in production below the agreed volume would be the difference between 43p and the prevailing gas price. And yes, the wording of His Lordship’s statement very strongly suggests that they have negotiated these contracts with a fixed volume of gas, albeit conservatively estimated. So any shortfall, assuming gas prices remain very high, are likely to dwarf any profits they might make between the start of gas production and the application of the hedges in July.

[whocares765] 21/9/2021 09:18

#ANGSFully #funded £12m to reconnect old onshore #Gas #Field in #UKGas Prices through roof#Angus #Energy not moving upwards as market is still asleep ??????#Multibagger #Tiny #Market #Cap#Pennystock #AIM #FTSE #UJO #UKOG #EDRRe-rate like #COPL #FAR #EUA #HZM to 4p! IMO

[ultimatejustice9] 21/9/2021 09:06

Understand you are not tempted. --------------However, I suspect George now knows that a sidetrack absolutely must be drilled - and successfully of course - in order for ANGS to have any chance of delivering on the hedge commitments. If I'm right, scary stuff...-------half production at £1.8 a therm would work even when the hedge kicks in! Not scary for me , this is what investing is all about.

[ultimatejustice9] 21/9/2021 09:04

half of George's "conservative" 5 mmscfd figure- without the sidetrack? Imo they should forget the sidetrack and produce asap given the record prices and the media attention. The guardian had gas price as its main article yesterday! This is big news

[ultimatejustice9] 21/9/2021 09:03

must cover a fixed volume of gas and not a variable volume merely based on a percentage of production---Where does it say that ? Why would a finance company give Angs 12m then default them if they didn't reach the level of gas required. Surely it must be 70% of WHAT they produce ?

[whocares765] 21/9/2021 08:34

#ANGSFully #funded £12m to reconnect old onshore #Gas #Field in #UKGas Prices through roof#Angus #Energy not moving upwards as market is still asleep ??????#Multibagger #Tiny #Market #Cap#Pennystock #AIM #FTSE #UJO #UKOG #EDRRe-rate like #COPL #FAR #EUA #HZM to 4p! IMO

[headinthesand] 21/9/2021 08:18

My view remains that the committed-to hedge (which from the company's own issued information must cover a fixed volume of gas and not a variable volume merely based on a percentage of production) exposes ANGS to very high levels of potential risk, should it not be able to produce the gas volumes required under the hedge to be delivered.

The problem for ANGS is that it seemingly based all its workings on some outdated CPR. But the clearest and most realistic indicator of Poundland's ability to produce comes from OGA official figures - and when the field was most recently being operated, these show an average production of around only half of George's "conservative" 5 mmscfd figure.

Which is why the superficially counter-intuitive spectre of a further first production-delaying sidetrack keeps getting raised. Of course, if circumstances were different, it would be utterly insane to consider this right now, since with current gas pricing, the company should be breaking its neck to get to first gas ASAFP.

However, I suspect George now knows that a sidetrack absolutely must be drilled - and successfully of course - in order for ANGS to have any chance of delivering on the hedge commitments. If I'm right, scary stuff...

So no UJ, I am categorically not tempted.