Angus Energy Share Discussion Threads

[3put] 15/6/2022 22:10

Can the company please confirm the sidetrack schedule please. Asked on 30 May 2022
The precise spud date has not been set but is expected to be in the first three weeks of July.

[3put] 15/6/2022 22:10

Was the deal to acquire the remaining 49% of SFB dilutive or accretive for shareholders when you add in all the associated funding?

Thank you. Asked on 30 May 2022
It was massively accretive and not dilutive at all. We acquired the 49%, which by the October P90 valuation was worth c.£25 million, for £14 million. We won’t call it the deal of the century, but it is an outstandingly good deal, especially when you consider that the average forward gas price in that October 2021 CPR has almost doubled today.

It is difficult to do the sums easily, since our own market cap prior to the announcement was only £17.5m (at 1.28p) and barely reflected the October CPR valuation of our 51% interest let alone potential (and now at Brockham actual production) at the southern oil fields. A decent estimate of 100% of Saltfleetby (just on the lower October CPR) and, say, just £10m for the oil fields would yield a value around the £60m mark and give a price per fully diluted share of nearer 2.5p. With current prices, the sky is the limit.

Yes we nearly doubled the number of shares outstanding but, taking into account the price paid for the asset, we more than doubled the value of the company.

Also unlike past placings only a small fraction (4%) of this issuance wss to market participants who might trade out. The rest is either locked up or part of a strategic stake.

Finally the raising of the £6m cash – done to ensure the assent of regulators and lenders – puts the risk of further placings out of people’s minds. Retail should be able to work in this stock with confidence.

[3put] 15/6/2022 22:09

Given the amount of seismic performed over the last 25 years in the field and the number of bore-holes and side-tracks drilled, providing good offset data, presumably the company and its contractors must be wholly confident of hitting the target zone. Putting that aside, what operational risks exist and could the programme be more complicated or expensive than planned? What lessons have been learned from mistakes by previous drillers in this formation? Asked on 31 May 2022
Thanks. The level of confidence about the target zone is indeed very high. We are addressing an area of the reservoir which was being produced from by an existing well, which was shut in due to a well-bore related issue.

An non-exhaustive list of risks, ever present in all drilling programmes is given in hxxps://www.researchgate.net/publication/317248002_Downhole_Drilling_Problems

Pertinent here are 1) hole collapse – this occurred twice in the Saltfleetby field and both times in the same layer, so we have introduced mitigation measures and will approach this layer with appropriate caution and 2) differential sticking ; 3) loss of bottom hole assembly – this occurred twice at Saltfleetby and 4) lost circulation fluids with reservoir damage. Many of these issues can be managed by reducing mud weight which is easier to do when well control is not such an issue as in a depleted reservoir.

It is wrong to characterise the historical drilling programmes at Saltfleetby as being especially prone to failure. Drilling was conducted between 1984 and 2017 by a number of Operators of varying competence. This being the UK’s largest onshore gas field, a great number of the earlier side tracks were in fact wholly exploratory. Some of the later drilling programmes did encounter problems which (by the common agreement of many specialists present at the time) could have been avoided with a relatively small degree of caution by the then drilling manager.

As we have advised before, this sidetrack has been planned with the benefit of enhanced 3D seismic and the oversight of a great number of independent drilling engineers and specialists. Some of the later side-tracks did not benefit from such oversight.

Angus’ drilling programmes have generally been well executed – albeit with disappointment about the target zone at Brockham and Lidsey. Angus drilled Horse Hill-1 successfully before selling out to partners and drilling programmes at the other fields either did not encounter the sorts of issues listed above or Angus was able to rectify them swiftly.

[3put] 15/6/2022 22:09

Can we please have an update on all the relevant permissions needed for current and near future work. Asked on 14 June 2022
We will answer this question in the ordinary course of our Q&A, but as regards our recommissioning project at Saltfleetby we note that on 22 March 2022 we have already answered this question as follows:

“Angus Energy plc (AIM: ANGS) is pleased to announce that the Environment Agency has issued its Variation Notice for the existing Saltfleetby gas field permit. The site permit now encompasses the new activities of processing and compressing of gas for direct export to National Grid. No further regulatory or planning permissions are required before First Gas.”

[jtidsbadly] 15/6/2022 21:37

1347: yes that’s the one. It hasn’t appeared on the LSE RNS screen, on my iPad at least.

[jtidsbadly] 15/6/2022 21:32

noelpbz: we still don’t know if they can drill a sidetrack while piping gas from the existing two wells. If they can’t, and the gas price goes higher, it’s hard to see how they’ll raise the money required to meet their commitments. Similarly, if the sidetrack, once drilled, fails to find commercial quantities of gas, they’ll be in trouble. And the two existing wells need to start flowing soon and at 5mmscfd+. A higher gas price merely raises the stakes.

[1347] 15/6/2022 21:31

JT This is the last RNS as far as I can tell, it was released yesterday, 14th June 2022 at 16:36 BST.

[jtidsbadly] 15/6/2022 21:21

1347: re the RNS, a poster on the other site attached it to his post last evening. It was in the form of an RNS. The text is the same as the 14 June News update on the website. It was posted at 16.55 under ”RNS”. I can’t attach it here, for some reason.

[noelpbz] 15/6/2022 21:03

JT - yes, at only 1.5M/therms per month, big problem, gas price though will need to be >£3/therm to approach break even with the HEDGE Oct onwards. Could happen - we definitely need some output from the sidetrack - anything even O.5M therms would help.

Then again who knows what the two existing well heads will generate ??

[jtidsbadly] 15/6/2022 20:45

1347: it’s possible he’d been asleep for two years, like that other chap.

[jtidsbadly] 15/6/2022 20:40

HITS: caravanboy on the other site should be corrected. It depends on the definition of “first gas” as to whether or not they’ve got all the necessary regulatory permissions in place, doesn't it? The latest investor question answer, which they've rushed out with indecent haste, is highly ambiguous and open to interpretation if they’re going to avoid defining “first gas”.

[1347] 15/6/2022 20:38

JT The last news I see is 14 June 2022: Angus Energy – Progress Update at Saltfleetby

No I didn't see that Boracic post, as I've said before, I only skim the Kansas boilerhouse BB nowadays. Quite the optimist wan't he/she/it..

[jtidsbadly] 15/6/2022 20:29

1347: here it is, 3 June:
sts: 380
Price: 1.125
Hold
RE: Gas03 Jun 2022 10:15
As a recent buyer of these shares I think GL should just say 'we are hoping for gas before the end of this year ' .

[3put] 15/6/2022 20:25

HITS: 100 million over 3 years must be closer to 150 million now ?

[3put] 15/6/2022 20:25

Why did gas jump so much today?

[jtidsbadly] 15/6/2022 20:24

1347: it was released last evening, after hours, but still hasn’t appeared on the LSE RNS page. The text of it is the latest addition on the Anguish “news” page on their website.

I can’t find the Boracic post now either. It was reasonably good. I liked the moniker.

[1347] 15/6/2022 19:28

JT No I don't think there has been an RNS today. Not aware of Boracic in the Kansas boiler room either. Holding back those shares though looks iffy to me, but then again so much with this company looks iffy to me.

[jtidsbadly] 15/6/2022 19:09

1347: yes, there’s no mention of of the enlarged number of shares in issue on the company website. Odd. There’s no RNS on the LSE site today either, though there appears to have been one.

Even more odd, a new poster using the name Boracic made a single contribution recently on the other site! I’d never heard of Brozic either. Not my genre. The song is on YouTube!

[1347] 15/6/2022 18:55

JT Never heard of them, are you sure you don't mean Boracic? That would be more appropriate for Anguish Energy 'investors'.

BTW As far as I know they have not yet admitted the second tranche of placing shares, unusual in my experience once the authority has been voted, do you think they are deliberately holding off until enough of them are foward sold or the price is higher?

[jtidsbadly] 15/6/2022 18:38

noelpbz: the potential liability on the hedge contracts is a moveable feast. The higher the gas price goes, the bigger it gets.

[jtidsbadly] 15/6/2022 17:24

1347: or, as the little-known band Brozic put in in their even less-known song “Drop”:

“forever stuck in this Anguish
Feel I'm forever stuck wit this pain
I was about to get rich and famous
But now I'm about to blow my brains”

I’m sure shareholders will know the feeling, what?

[3put] 15/6/2022 16:50

1347 is de-ramping Jack slapdash

[3put] 15/6/2022 16:48

HITS: Can you run the numbers again on 260p please?

[1347] 15/6/2022 16:23

But it's all tight now, in fact, it's a gas
But it's all tight, I'm Rampin' Jack Flash
Where's the gas, gas, gas?

[tidy 2] 15/6/2022 16:22

Gas now 258.00 31.5%