Angus Energy Share Discussion Threads

[3put] 16/6/2022 20:35

Gas flying

[3put] 16/6/2022 20:35

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] 16/6/2022 20:35

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] 16/6/2022 20:34

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.

[1347] 16/6/2022 20:31

JT Don't forget the Hokey Cokey. Talking of which, I wonder what happened to that huge new oilfield near Lidsey (back in the frame) that was only uncovered by some new seismic work after all the oil companies (including Anguish Energy themselves) had missed it in almost 40 years. You'd think with ~$120 Brent it'd be like the New Year Day sales at Harrods in that data room, what, what?

[jtidsbadly] 16/6/2022 19:31

1347: yes, a bit late but smart work on the finance front, what? The quickstep, by the way - including the Chiswick one - involves several steps to the side, and even a turn or two, once you’re a proficient. Otherwise it would be the Lambeth Walk, what?

[1347] 16/6/2022 17:59

"a bit late on full production" ???? It's two years late!

[headinthesand] 16/6/2022 17:41

For all the utter BS about guaranteed multi-bagging from the desperate ramp squad next door, this remains brutally simple.

It's a red or black play and it all hinges on the sidetrack. They've just raised some cash a) to be able to be a bit late on full production (but not too late - after all, Mercuria's owed £3 million on the hedge for July) and b) to fund the sidetrack attempt.

Well, I say "raised some cash". Okay they announced the first half of the £6 million Aleph and associated mates placing... but isn't it about time they announced that the second half has also taken place, following the (E)GM?

[1347] 16/6/2022 17:34

Chiswick quickstep? Did someone mention the Chiswick quickstep? Surely it should be the Chiswick sidestep? Anyway I feel a suitable song is needed for it, whatever it's called...

Any time you’re Chiswick way
Any evening, any day,
You’ll find us all
Doin’ the Chiswick ramp.

Ev’ry little Chiswick gal
With her little Chiswick pal,
You’ll find ‘em all
Doin’ the Chiswick ramp.

Ev’rything free and easy,
Do as we darn well pleasey,
Why don’t you make your way there?
Go there, stay there.

Once you get down Chiswick way
Ev’ry evening, ev’ry day,
You’ll find yourself
Doin’ the Chiswick ramp.

Oy!

[jtidsbadly] 16/6/2022 17:09

..and it’s JTidsbadly, Jonny. Is there a reason why you seem to be having a problem with this?

[jtidsbadly] 16/6/2022 17:05

Jonny, it seems to me the share price is stuck, in spite of the management’s claims re imminent “first gas”, because no one other than the jayhawker shills on the other site, and possibly yourself, believes a single utterance of this management. And who can blame them, when they fudge every answer? The patsy questions they put up on the Q&A appear often to be designed to allow the deployment of the Chiswick quickstep. If the Interim MD would just give a simple, straight answer re these important issues, with no hint of ambiguity or conditions, the share price would have a better chance. Unless the true answers are not the answers the market is hoping to hear.

[chickbait] 16/6/2022 16:52

When did they get approval. I must have missed that?

[jtidsbadly] 16/6/2022 16:52

gasman10: to state that they are ready, on the strength of their news releases and Q&A answers to date, is a bit of a stretch. They've dodged a straight answer to all the questions they’ve been asked on the subject. They may have all the necessary approvals and permissions in place, they may not.
,

[gasman10] 16/6/2022 16:33

They are allowed chickbait

[chickbait] 16/6/2022 16:33

How long does drilling said sidetrack take?

[chickbait] 16/6/2022 16:32

3put. Also, what happens if they are not allowed to drill said sidetrack when they eventually start producing gas?

[chickbait] 16/6/2022 16:30

3put. Can you remind the board how many unsuccessful attempts have been made on the said sidetrack to date?

[3put] 16/6/2022 15:31

HITS: Depends on how much flow we have. Not long to wait now. Gas in a few days. If we deliver a sidetrack then its 130million over 3 years as starter.

[3put] 16/6/2022 15:30

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.

[headinthesand] 16/6/2022 15:29

Next door either can't or won't answer the question "How much gross revenue does ANGS get left with out of Saltfleetby if the sidetrack is unsuccessful?"

In fact, the heavenly choir won't even consider the possibility, because (of course) it blows their much-touted "best of all possible worlds" narrative to pieces... how's that for intellectual and dispassionate rigour on their part?

[3put] 16/6/2022 15:29

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.”

[1347] 16/6/2022 15:17

JT As I've been saying for a while now, unless and until I see an updated EA permit, including the variations, I assume they don't, regardless of what waffle they come out with.

[jtidsbadly] 16/6/2022 14:43

If the reference to the March Q&A answer to the question “have you received all the required regulatory permissions?” is the full answer, why is the question going to be addressed again in the normal course of Q&A’s - presumably meaning the end of the month? And why have they rushed out this half-answer? Any views, Jonny?