Angus Energy Share Discussion Threads

[sincero1] 22/10/2021 07:30

yawn..same spectrum different ends...truth is the best defence...

[headinthesand] 21/10/2021 22:58

3Put is clearly worried enough about the issues raised for discussion this evening to feel the need to fill up this board with copy n paste spam.

[3put] 21/10/2021 22:39

If the sidetrack produces the extra gas, will it reduce the hedge percentage of the gas produced. Asked on 1 October 2021
Yes. The hedged amount is fixed so incremental gas is unhedged.


--------------Some investor questions answered recently

[3put] 21/10/2021 22:38

I have just checked your planning statement on slide 13, It states the sidetrack duration will take up to 16 weeks as mentioned from another poster. Please could you clear this query up once and for all. Asked on 1 October 2021
As now already noted, all applicants for permits and permissions in any walk of life give themselves much more time to complete a task than is necessary. This is because of the length of time and the cost incurred in obtaining the permission in the first place. They will then advise to market, at commencement of operations, a shorter period and expect to come in on the short end of that.

Reabold for instance advised six to ten weeks for drilling the West Newton WNB1 and completed in 6 weeks before moving onto the sidetrack. This was drilled to 2250 m. We are side-tracking from about 1150m to a Measured Depth (including horizontal sections) of about 3000m or 1850 metres of drilling. Nor are we doing a well test which might extend the programme, because we are moving straight from drilling into production here, so there is no need for a well test.

The hardest rock in Europe gives a rate of penetration of about 3m/hour (see page 6 of hxxps://pangea.stanford.edu/ERE/pdf/IGAstandard/SGW/2017/Baujard.pdf). That would imply 600 hours here or 25 days/3-4 weeks of continuous drilling. Even assuming the drilling was no more than half of the time advised, then to drill through this much granite would be only be 7 or 8 weeks.

Granite of course wears drill bits faster and there is much changing of drilling equipment when addressing such hard rock. We are not drilling through granite in Cornwall or Scotland but through sandstones, clays, coals and limestones in Lincolnshire. We anticipate 20 odd days of 24/7 drilling – so a rate of penetration of over 12m/hour (verify by page 29 of Halco’s helpful graphs on rates of penetration hxxps://www.halco.uk/wp-content/uploads/2020/06/A-Z-Drilling.pdf). Of course drilling is not the only workstream here, and even if we were to more than double the time, to suggest five to six weeks of work, we would actually expect the rig to be down inside that envelope. Things can go wrong and extend the timetable – we have always been frank about that – but this is a reasonable verifiable estimate.

What disturbs me about assertions by this poster (and concert parties) – and they are hardly the first instances of obvious falsheoods deliberately spread – is that he holds himself out to be a knowledgeable investor and could have fact checked any of this with online sources in a matter of minutes. Worse still by claiming to have discovered an “internal̶1; company document he implies some great conspiracy by the Company and its Board, rather than sharing his source from the outset and pointing to the very obvious conclusion here: that people give themselves ample leeway in any official permission!

[3put] 21/10/2021 22:38

There has been much recent comment on the investment forums about how long the sidetrack would take to drill at Saltfleetby. Certain posters have claimed that they have internal company documents that say this will take 16 weeks. Please can you let me know if this is correct or if you expect it to take a different amount of time?

Also being speculated about is the volume of gas that has been hedged. It has been claimed that you have hedged 70% of 10mmscf/d and therefore the sidetrack has to be completed and everything has to run well for the project to be viable. Please could you confirm if this is correct or if the hedge is for different figures? Asked on 23 September 2021
We would be surprised and disappointed if the drilling part of the programme exceeded 28 days and the entire programme involved more than 7-10 days either side. On behalf of the Board, we have never heard or seen of any internal document which suggested we were planning for a 16 week side-track at Saltfleetby and we would challenge the poster to produce it. For that matter I haven’t heard of a drilling programme anywhere to these depths which could conceivably take 16 weeks – except perhaps on Mars, which is possibly where your poster hails from.

Supplementally, one poster has pointed out that the Planning Application allowed for 16 weeks time. This is not some “internal document” which the poster only had access to, but part of an application that is publicly available. Every company puts in their application for more time than is absolutely necessary in every sphere of life. This is hardly news. We reiterate drilling to these depths does not take 16 weeks as every reasoning investor in this industry knows.

The other assertion is equally bizarre and must be challenged. We have already clearly stated that the hedge was for “approximately 70% of the Company’s future gas sales …. under a conservative projection” and this was prudently set by the lenders, based, as we understand it, on their own estmates of achievable flow from the existing wells and excluding the contribution from the side track. Otherwise it would obviously not be a conservative projection.

[3put] 21/10/2021 22:38

Some board posters are saying that a side track done in November would delay First Gas by up to 3 months. This sounds like nonsense. Can you comment? Asked on 21 September 2021
No it would emphatically not delay First Gas by three months. In fact there is no reason for it to delay First Gas by any material length of time and it is certainly not in the plan that it does. We are planning to execute the limited foundation work required beforehand and move heavy equipment in both before and after the drilling programme and will be following this week’s HAZOP with further SIMOP (Simultaneous Operations) planning which will allow for sensibly risked continuous working on the site during the programme. Again this poster may have misunderstood the nature of the equipment coming onto site, almost all of which is skid-mounted and pre-fabricated for immediate tie-in to the pipework and control lines. Thus some of the equipment won’t come on until February but none of the units will require on-site fabrication beyond connection work.

[3put] 21/10/2021 22:37

What are the views of managment on the value of the company given its current prospects? Asked on 21 September 2021
We have argued recently for a sum of the parts valuation of nearer 3.5 pence. That may seem ambitous but at current spot and forward gas prices the cash generating potential of Saltfleetby has been grossly underestimated merely by virtue of the lapse of time snce the last CPR was done on Saltfleetby in early 2020 when the gas price was near an historic low. We are still confident of restoring value to the oil assets after the drilling results at Lidsey in 2017 and Brockham in 2018/19 and the difficulties with planning permissions at Balcombe. This process continues unabated, albeit in a slow or sometimes difficult regulatory and planning environment. Finally we believe that our venture into geothermal will come to form the greater part of the Sum of the Parts of Angus in the future and will meet with a more enthusiastic response from all stakeholders – regulatory, planning, financing and others.

[3put] 21/10/2021 22:37

There is no hedge on production until July 2022. What is the value of all production from March 2022 to July 2022 at the prices on the present NBP Heren forward curve for these months with and without the side track? Asked on 21 September 2021
The short answer is the field ,on the original CPR plateau volumes but at the latest forward curve prices, might generate £17 mllion over those four months with the side track and about £8.5m without it. Angus share is 51%. Ordinary opex might be about £0.6m excluding debt service.

The forward prices from are given below in $/MMBTU (approx pence/therm equivalent in brackets). Prices from ICE for contracts for Q2 in pence/therm in particular seem to be a penny or two better which is probably the £/$ exchange rate (see

Heren March $28.583 (213p); April $16.679 (119p); May $14.260 (102p); June $13.774 (98p), given a conservative conversion rate of volume (mmscf) to heat value (therms) – i.e. multiply mmscf by 10500 to get therms – the field would generate in total over those four months gross revenues for all partners of £17.1 million at 10mmscf/d (i.e. CPR plateau production with side track) or £8.6 million at 5 mmscf/d (i.e. CPR lower plateau production with no sidetrack). Operating expenses for full year 2022 according to CPR might be of the order of £2.3m and therefore for this period would be c. £0.6m.

All of this information is already publicly available, and we stress these are presently notional numbers arrived at approxmately and that these prices are not hedged in any way and therefore might not be available come production in March etc. However whilst the final outcome may vary considerably, we and our partners do anticipate strong demand for gas in the coming years regardless of short term price effects.

[3put] 21/10/2021 22:37

When is the variation to the existing Saltfleetby Environment Agency permit expected to be approved? What are the steps in this process? Asked on 21 September 2021
The Company has already engaged in a detailed submission and has received back formal questions in the form of Schedule 5 Notices requesting further detailed information. This is a normal procedure. We understand that our application and responses to the Sch 5 have been passed to the relevant national teams looking variously at noise, groundwater and air pollution and following that process will be passed to the local officers for final approval. Grant of permit may be subject certain pre-operational conditions. We cannot however assume a timeline. There may be further enquiries but, to date, the application is following a normal course.

Whilst a natural gas processing plant is not uncomplicated, the site has been processing gas in a more modest fashion for 20 years, and we believe that the addtonal quantity of hydrocarbon fluid stored at any one time will not be of an order of magnitude as to require a major overhaul of groundwater protection (the site already has geotextile membrane, ditches and interceptor systems and we are supplementing this with further bunding and handling procedures). Nor is there any anticipation of flaring or venting of gas other than in commissioning and emergency or maintenance situations. Even maintenance flaring will be kept to a minmum by controlled shutdown procedures. Noise pollution, where we are also subject to local minerals planning authority oversight, is also a focus of management and existing sound modelling will be supplemented by continuous improvement as we engage with the practical realities of different operating conditions.

[3put] 21/10/2021 22:37

Can the company give an update regarding the Shell agreement. Is the contract still in place and the terms as was when agreed?Thanks . Asked on 21 September 2021
The contract is still in place and the terms are unchanged.

[3put] 21/10/2021 22:37

When can we expect a fuller update on geothermal opportunities and a staged and sensible funding structure for them over the coming years. What sort of funding to you anticipate (government grant, equity, mezzanine, debt) and at which stage in the overall project? What are the principal risks and rewards for Angus existing shareholders. Asked on 1 September 2021
We are lookiing forward to sharing this update during the first half of September and will endeavour to include all of these issues. Our original presentaiton has grown in depth and detail during the summer and we hope that it will present a reasonable, achievable and financeable project with significant long term value for shareholders.

[3put] 21/10/2021 22:36

Hello, detractors of the company are pointing to the previously unsuccessful sidetracks at Saltfleetby. What gives Angus a high level of confidence that the outcome will be different? Thank you. Asked on 29 July 2021
A. The drilling over the last 20 years at Saltfleetby, once the early exploration was past, was not especially difficult or unsuccessful. Nor is it true that the reservoir presents greater hazards than any other gas reservoir. It should be noted that the drilling strategy of the previous operators in the early years was to drill a pilot hole first and then side track horizontally it to increase the chances of hitting a productive layer. Very often the pilot well itself was deliberately “hockey-sticked” to verify productivity of a previously encountered layer.

SF01, actually originally spudded back in 1986, was a pilot well. This was sidetracked no less than six times between 1996 and 1998 when the field was poorly understood and just being explored. The final side track SF01U was actually the most productive well on the field.

Thereafter the record was excellent until previous operators attempted to address the southern lobe of the reservoir. SF02 did not require a side track at all and was a good producer. SF03 required one sidetrack and was a good producer. SF04 likewise a good producer, no side track required. SF05 again no side track but a less impressive but reasonable producer.

Later drilling on the field, in particular exploratory drilling aimed at the southern satellite structure (via SF06 and SF08) did encounter both less productive zones and these boreholes did require no less than five side tracks betwen them (much as the original SF01 had) and had limited but not negligible success. However with our side track we are actually addressing the better understood main reservoir again and not that southern lobe; we are also aiming at an area within the main reservoir which we know with exceedingly high levels of confidence to have been both greatly productive and not exhausted by previous boreholes.

SF07, something of a special case, was originally drilled in 2003 and had four side tracks: the first two encountered low permeability whilst the latter two, SF07X and SF07W were drilled in 2016 and were beset with operational difficulties which may be the source of the rumour that side-tracking in this field was particularly difficult.

The problems involved loss of part of the downhole assembly due, inter alia, to differential sticking (note we are taking great care to avoid sticking and are supported by specialist and respected managed pressure drilling consultants as appropriate for a partially depleted reservoir) whilst the other issue involved hole collapse in a coal rich seam (prone to instability) just above the target Westphalian layer: we are aware of this and we have adjusted the angle of approach accordingly. It should be noted that the drilling manager at the time proceeded against the explicit advice of the drilling company and indeed the company’s own consultant engineer.

Again we go into this armed with previous operators’ experience and indeed a full audit of our programme by an Aberdeen based but internationally renowned engineering and drilling consultancy as well as the Lender’s own Technical Committee, manned by experts from a variety of backgrounds. We also have fully reprocessed seismic to guide us past any localised faulting.

Nothing in drilling is without risk – but in terms of basics such as where to drill (finding the most productive layer) & how to drill (and avoid sticking or hole collapse), most seasoned operators would see this as much lower risk, in fact, than would be the case on any relatively newly addressed reservoir.

[3put] 21/10/2021 22:36

Can the company give more clarity on how it expects to fund geothermal projects and/or any drilling plans at Lidsey? Asked on 28 July 2021
As regards Lidsey, we need to have this seismic reinterpretation complete and agreed with partners. We should also consider a Competent Person update on the Field and finally complete local authority planning permissions. Then there is a presentation to our shareholders, potential external investors and fellow industry partners. Our large Licence holding of 80%, prudently increased in 2019, gives us more than usual flexibility, via farmout, in reducing or possibly eliminating any call on our own equity base for what should be a relatively inexpensive intervention on an existing site, with existing boreholes and supporting infrastructure.

As regards the Geothermal Programme, a great variety of financing structures are being discussed with our funding partners and we have had pleasing expressions of interest from there and beyond – particularly for the development stages of the project. In the meantime our focus now is on reducing the cost of drilling and mitigating the risks around the drilling and building up in-house expertise and intellectual property as well as acquiring sites and interfacing with stakeholders around those specific sites.

[sincero1] 21/10/2021 19:33

jtisadly and 13reallyneedsahobby47 are tag teaming the negativity tonight...to me, to you...to me , to you....its hysterical ....both so scared of positivity...

[1347] 21/10/2021 19:23

gaffer - I doubt they would be allowed to, the £12 m was specifically to fund Poundland, I doubt they have much leeway for anything else. The Christmas wine merchant bill will be their most immediate problem (JT will explain it, what what).

[gaffer73] 21/10/2021 19:19

Makes you wonder why they didn't draw down another 1.4m to pay Knowe. It would have been a simpler solution and probably cheaper.

[jtidsbadly] 21/10/2021 19:15

Yes, that's all we’ve been told so far about how much they've drawn. There must be a reason they need the £12mm though, mustn't there? It should have been simpler to negotiate a smaller sum. Though the Interim MD did say that he was offered $20mm. by a large bank 18 months ago, which he appears to have turned down on the basis that it was more than Anguish needed.

[gaffer73] 21/10/2021 19:07

I will, thanks

[sincero1] 21/10/2021 19:03

gaffer, the resident disingenuous grey old window lickers are being economical with their responses...trying to keep it nice and negative. have a look at the rns' dated 13th May 21 and 30th nov 2020. You will note Mercuria are involved and that really irks the negative brigade

[gaffer73] 21/10/2021 19:03

It looks like they haven't used the 12m yet, is that correct? "The GBP12 million facility for the re-development of Saltfleetby has been signed, the Conditions Precedents have been fulfilled and the Group has already drawn down GBP5.84m."

[jtidsbadly] 21/10/2021 18:41

Incidentally, it would be interesting to know whether the loan terms allow Anguish to apply unused loan proceeds in repaying instalments as they fall due. If they’re monthly instalments, the terms must allow it. In which case, Anguish’s debt burden would carry on for longer than the loan term, or later instalments would get higher and higher. It would also be interesting to know whether there are undisclosed clauses in the agreements covering these elements. If there are not, then the chances of the Lenders enforcing their charges in the event of default will presumably be very high.

Also (by the way) the Lenders have fixed and floating charges on Anguish’s assets. Knowe has a floating charge. Fixed charges offer much greater entitlement in an insolvency. Knowe would surely have preferred a full repayment of their loan in April but I dare say it’s been made clear to them that Anguish won't have the money to do this, whereas a deferral may offer the vague possibility of a successful sidetrack coming to the rescue.

[jtidsbadly] 21/10/2021 18:27

1347: I haven’t seen a repayment schedule either but it’s an amortising loan, so will be paid back in instalments. Whether these are annual or monthly, I don’t know. It will be one or the other though. It’s a 4-year loan at LIBOR+12%, so will be paid off in equal instalments over its life.

[1347] 21/10/2021 18:11

gaffer You are correct in that I don't see that they have actually published the repayment schedule. However they have taken out an amortising loan, which normally involves fixed periodic repayments and given that it's a 4 year loan we (well at least I) have assumed that means annual payments starting one year after first drawdown which was June 2021. However you'll find that there's a lot of things that are not quite what they seem with Anguish Energy so sometimes we (or at least I) try and fill in the gaps. Maybe others can add to that?