Angus Energy Share Discussion Threads

[jtidsbadly] 27/6/2022 15:12

The other DDDD chat board is filling up with references/referrals to the Authorities re the actions and inactions of the Board of Directors. Good luck with that, it was pretty clear the trouble they might be in this month, from last year’s Loan Charges and the latest company financial report. It all looks very odd though. Incompetent at best.

[bobaxe1] 27/6/2022 14:04

JA5 Used to hang around brockham town hall cafe going off about tids Also digging for dirt on angs has an old gripe with tids when they worked in Georgia sad really sad

[tidy 2] 27/6/2022 13:51

UK Natural Gas is expected to trade at 191.33 GBp/Thm by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 274.03 in 12 months time.hTTps://tradingeconomics.com/commodity/uk-natural-gasiog 54 scuffs per day 10-15p /therm opex Plus condensate 150m cap. Do the math.

[gaffer73] 27/6/2022 13:38

The compressors are on the opposite side of the site to the control room is my point.

[ja51oiler] 27/6/2022 13:30

They are not "gas engines" I assume you mean gas generators? They are the hired diesel ones. The gas ones appear to not have been delivered yet. The Gas compressor package was delivered to site on April the 29th and the second is yet to show up!

[headinthesand] 27/6/2022 13:29

3Put really is getting desperate with his copy n paste fest of trying to drown out difficult questions with old and outdated info.

To actually deal with the reality of things as it is today:-

The is only one gas compression engine on site, not two. That is confirmed both by ANGS RNSes and by very recent site drone photos. ANGS may well have ordered two (and seem to have done so) but as of yet, only one's been delivered to be plumbed in.

That's not a problem per se - ANGS has said for several months that the second gas compression engine won't be needed until the sidetrack (presuming the latter is successful).

What it DOES mean though is that, regardless of any hoped-for pressure build-up, the maximum production capacity of the field with just one gas compression engine is limited to 1.5 million therms a month.

STILL no news on:-

1. the date for first gas.

2. the date on which Shell will start offtaking (i.e. purchasing) any produced gas.

3. a clear, definitive and simple yes/no answer as to whether the sidetrack attempt can in fact be made without having to suspend production.

4. the incongruity between Aleph Fin C's 7.19%/164 million share holding as per the ANGUS website and the complete absence of any TR-1

5. the mystery of why no announcement has been made on Aleph taking the second £3 million's worth of shares - that's 273 million extra shares as allegedly agreed in the recent £6 million placing. In fact at the very least, ANGS would have to announce the increase in shares in issue, were this to have occurred (up from 2,283 million to 2,556 million), so one can only presume that has not in fact happened.

[3put] 27/6/2022 13:21

Work on the sidetrack started

[redflag2023] 27/6/2022 12:55

Vast RNs as I said The second milling circuit further optimises the operations at Baita Plai and doubles milling capacity at the plant. With two milling circuits fully functioning the two mills combined are capable of processing 14,000 tonnes per month.

[3put] 27/6/2022 12:50

German consumers could face a tripling of gas prices in the coming months after Russia’s throttling of deliveries to Europe, a senior energy official has said.

Moscow reduced the flow of gas through the Nord Stream 1 pipeline by 40% last week, citing technical reasons that Berlin dismisses as a pretext, prompting a four- to sixfold rise in market prices, said the head of Germany’s federal network agency, Klaus Müller.

Such “enormous leaps in price” were unlikely to be passed down entirely to consumers, Müller said, but German citizens had to brace themselves for dramatically rising costs. “A doubling or tripling is possible,” he told the public broadcaster ARD.

[3put] 27/6/2022 12:28

Recently answered questions
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.”

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.

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.

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.

As referenced in a recent interview with George Lucan, if all goes to plan with Saltfleetby is the company still hoping to pay long term shareholders a special dividend? Thanks. Asked on 30 May 2022
Thank you. The new strategic investors are advocating a regular dividend payout policy of 50%. The BoD certainly believe that large reliable dividends are still the best corporate communications that a company can make with shareholders.

Does the company continue to be in discussions with the 2 interested parties in Saltfleetby? Asked on 30 May 2022
We have kept an open line to three participants. Non-binding offers have been tabled but they did not reflect the true value of the asset or were contingent on various milestones being met.

It is one thing to low-ball ahead of proof of success, but to low-ball and make a bid contingent on proof of success seems to be having one’s cake and eating it.

In short we were being faced with the same issue that the old Angus had with Horse Hill – sell out the asset at an undervalue ahead of final proof of success, or press on alone and indeed increase our stake in the asset. On this occasion we chose the latter.

Can you briefly explain the current tax losses situation for Angus and what impact acquiring 100 of the Saltfleetby field will have on this? Asked on 26 May 2022
It is relatively simple. Angus has ring-fence (i.e. usable against hydrocarbon profits) tax losses of around £21m and these were factored into the P90 valuation. Saltfleetby Energy Limited has about £26 million of ring-fence, so a valuation with this included would yield some extra benefits.

During GLs recent interview with the LSE, it was noted the company would like to diversify and explore new sources of alternative energy.

Can you please confirm if you have identified any new potential locations that could be of interest, what you look for when scouting for new locations, plus what other sources of energy the company would be interested in moving into, given the opportunity. Asked on 6 May 2022
As regards deep geothermal we look for sources of heat and fracturing and these are mostly but not all in the southwest. Shallower reservoirs of heat exist, even in Lincolnshire, but these don’t lend themselves to heat for electricity generation but offer opportunities for local heating or assisted agriculture.

Many of the other energy initiatives looked at by ourselves and colleagues arise because the best sources of energy (whether gas, wind or geothermal) are often furthest from off-take infrastructure (pipelines or grid networks). Where grid and pipeline access is most abundant, problems of population density make local planning permissions very difficult. This stimulates research variously into gas to wire, hydrolysis of water for H2, waste to energy and storage.

Access to off-take, especially the electrical grid, is probably the biggest single hindrance to the development of alternative energy in the UK.

The British Energy Security Strategy identifies, further infrastructure is required to establish energy independence from overseas countries.

Can you please confirm, if framework opportunities to license from local authority owned lands, to generate energy arose, would Angus Energy be interested in being considered as the operator? Asked on 6 May 2022
Yes and our engagement with local councils has greatly improved over the last few years. The range of projects has also grown with geothermal, assisted agriculture and energy storage being some of the main points of interest. With our engagement in geothermal, we have found local authorities to be particularly welcoming and helpful.

Will the SFB sidetrack be drilled with continuous Gas production or will the gas production plant be turned off for the duration of the drill? Asked on 5 May 2022
Subject to final satisfaction of internal risk assessment SIMOPS are planned – i.e. simultaneous drilling and production. These is not an abnormal choice and indeed is common in far more restrictive areas such as offshore rigs. The plant when fully up and running benefits from a state of the art fire and gas leak detection, rapid blowdown and full set of monitoring and control instrumentation connected to a PLC as well as a full complement of alert operators.

Is there a forecast date for oil production at Lidsey oil field ?? Asked on 2 May 2022
We have been test producing at Lidsey and continue to encounter issues with the well-bore – including wax buildup and issues with pipe. We hope to update further on this field, including the possibility of side-track, when the team resources can be taken off Saltfleetby which is currently and rightly occupying our overwhelming attention.

Once the loan is clear,what would be the penalty costs to break the hedge as a rule of thumb. Thanks. Asked on 2 May 2022
There are not necessarily any significant penalty costs involved however the commercial cost is the difference between the forward curve prices for the period from the date at which the hedge is broken to the date of the scheduled maturity of the hedge versus the fixed hedge contract prices over that same period.

Thus the cost can only be known at the time the hedge counterparties determine to break or “counter hedge” it. In effect we would be taking out a new hedge for the residual period and amount but in the opposite direction – i.e. currently we are promising to supply Y therms for X pence/therm and to break the hedge we would be promising to buy Y therms for Z pence/therm. Z being the new forward curve prices and X being the original hedge contract prices.

In practice it would only make sense if we were interested in engaging in dynamic hedging – i.e. we felt we could do better trading in and out of positions over short contract months than the market. Generally speaking this is best described as gambling unless you have a large book of varied supply and distribution obligations and wish to balance it out in aggregate. At present we do not.

Hi, can I ask if the company is still in discussions with 2 interested parties for the sale of Saltfleetby, and if so, is the outcome of these discussions likely to be known and reported soon? Thank you. Asked on 2 May 2022
Discussions are continuing. Given the materiality of the disposal we are advised not to give further detail outside of RNS announcements.





Environmental impact appears to be one of the main concerns for individuals, who may have reservations on Angus expanding business operations, whilst satisfying the requisites of the Environment Act 2021 and associated legislation. Can you please provide an overview on what measures Angus have already taken and intend to develop upon, to ensure statutory compliance, corporate governance and innovative working practices, in regards to environmental sustainability. Asked on 2 May 2022
Thanks. Our principal regulators are OGA (NTSA), HSE and EA, and statutory bodies such as planning authorities. There is some overlap but less than might be helpful. Our compliance team now exceeds in number our technical team (excluding field operators), with two dedicated HSE liaisons, one EA liaison, one OGA liaison, one general planning and permitting lead.

We are a small company and the breadth of legislation, regulation, standards and so forth is daunting. Nonetheless our management systems have developed beyond recognition in the last two years and this is necessary when dealing with high pressure gas which is, after nuclear, one of the most hazardous businesses in the UK.

In terms of environmental compliance, the actual Saltfleetby Field presents fewer environmental hazards than a traditional oil field, as there is much less risk of fluid contamination to ground and water. Additionally electronic monitoring of flow has (for human safety) to be much more precise and involved than in traditional oil field practice. So on the whole we would regard the Saltfleetby Field as representing a much higher human safety risk but a much lower environmental risk than an oil field.

The exception is emissions to air. We require a flare at startup and some (but not all) maintenance events to acheive national grid specification gas, but otherwise we should not need to use the flare at all during the life of the field, although a tiny pilot flare is kept alight at all times to meet statutory requirements for emergency blowdown. Blowdown (i.e. flaring) for us means loss of principal inventory and commercial return – this is not an oilfield with associated gas as a headache. Gas is our reason for being here.

We have two scheduled group Zoom calls a day and, without any doubt, every day an issue of environmental compliance arises and is dealt with. At one level it is simply compliance (“what will EA think of this”) but at another level it is purposive (“what should we be doing or how could we do this better”). This is a sea change from the Angus of old.

We are committed to improving our carbon footprint – but we are led by an unforgiving Technical Director who rightly has regard to the “through-the-cycle” carbon cost of new equipment. Two innovations are planned – (a) a closed loop geothermal system for on site power generation up to 1MW and potentially retiring one gas fired generator and (b) a tie-up with a vertical farming operation which would take both heat, power for lighting and potentially CO2 emissions from the site for assisted agriculture.

We do, as a small company, adhere to the QCA. Up until December, on the strong encouragement of the Board, and whilst we awaited procurement and delivery of equipment to Saltfleetby, almost 50% of management time during 2021 was spent in developing our deep geothermal programme in southwest England. We are sincere in our desire to be an innovative part of Transition, but bear in mind that we are a small company at present focused on acting as a safe and responsible Operator in the immediate term and delivering good returns to those who have funded these operations..

Has a rig been ordered to drill the sidetrack yet?

Which month in 2022 do you expect the rig to arrive if so. Thank you. Asked on 2 May 2022
Yes. A rig was ordered in June 2021, considerable replacement parts for which were sourced from overseas. Although it was scheduled to be ready in October, none of the parts actually landed in the UK until December and as a consequence the rig itself would not have been ready until around now. This underlines the very real supply chain problems which we faced in H2 2021, and which continue to cause problems for many other Operators. If anything we think that the supply chain issues have gotten worse not better since then, and we are relieved to have our kit onshore.

There are alternative onshore rigs which we could have used for this side-track had we felt it necessary. The rig is undergoing testing and we do inspection reports and visits every three or four weeks. We are confident that it will be ready for moblisation at site at the end of June.

[sincero1] 27/6/2022 12:21

the closer to 1st gas the more the old grey disingenuous non shareholders post negativity....you can see their desperation, the humiliation...they were predicting the company would go bust long before getting to where they are now ...but old duffers don't stop posting...i'm enjoying your humiliation too much...keep going ..

[tidy 2] 27/6/2022 11:40

She will come good here. Gas producers are in a good place. Angs 10 scuffs p/d although hedged and iog 54 scuffs p/d are keepers imo at these lowly caps. Not sure if the opex here but iog 10-15p /therm

[headinthesand] 27/6/2022 11:29

3Put really is getting desperate with his copy n paste fest of trying to drown out difficult questions with old and outdated info.

To actually deal with the reality of things as it is today:-

The is only one gas compression engine on site, not two. That is confirmed both by ANGS RNSes and by very recent site drone photos. ANGS may well have ordered two (and seem to have done so) but as of yet, only one's been delivered to be plumbed in.

That's not a problem per se - ANGS has said for several months that the second gas compression engine won't be needed until the sidetrack (presuming the latter is successful).

What it DOES mean though is that, regardless of any hoped-for pressure build-up, the maximum production capacity of the field with just one gas compression engine is limited to 1.5 million therms a month.

STILL no news on:-

1. the date for first gas.

2. the date on which Shell will start offtaking (i.e. purchasing) any produced gas.

3. a clear, definitive and simple yes/no answer as to whether the sidetrack attempt can in fact be made without having to suspend production.

4. the incongruity between Aleph Fin C's 7.19%/164 million share holding as per the ANGUS website and the complete absence of any TR-1

5. the mystery of why no announcement has been made on Aleph taking the second £3 million's worth of shares - that's 273 million extra shares as allegedly agreed in the recent £6 million placing. In fact at the very least, ANGS would have to announce the increase in shares in issue, were this to have occurred (up from 2,283 million to 2,556 million), so one can only presume that has not in fact happened.

[3put] 27/6/2022 11:02

Recently answered questions
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.”

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.

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.

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.

As referenced in a recent interview with George Lucan, if all goes to plan with Saltfleetby is the company still hoping to pay long term shareholders a special dividend? Thanks. Asked on 30 May 2022
Thank you. The new strategic investors are advocating a regular dividend payout policy of 50%. The BoD certainly believe that large reliable dividends are still the best corporate communications that a company can make with shareholders.

Does the company continue to be in discussions with the 2 interested parties in Saltfleetby? Asked on 30 May 2022
We have kept an open line to three participants. Non-binding offers have been tabled but they did not reflect the true value of the asset or were contingent on various milestones being met.

It is one thing to low-ball ahead of proof of success, but to low-ball and make a bid contingent on proof of success seems to be having one’s cake and eating it.

In short we were being faced with the same issue that the old Angus had with Horse Hill – sell out the asset at an undervalue ahead of final proof of success, or press on alone and indeed increase our stake in the asset. On this occasion we chose the latter.

Can you briefly explain the current tax losses situation for Angus and what impact acquiring 100 of the Saltfleetby field will have on this? Asked on 26 May 2022
It is relatively simple. Angus has ring-fence (i.e. usable against hydrocarbon profits) tax losses of around £21m and these were factored into the P90 valuation. Saltfleetby Energy Limited has about £26 million of ring-fence, so a valuation with this included would yield some extra benefits.

During GLs recent interview with the LSE, it was noted the company would like to diversify and explore new sources of alternative energy.

Can you please confirm if you have identified any new potential locations that could be of interest, what you look for when scouting for new locations, plus what other sources of energy the company would be interested in moving into, given the opportunity. Asked on 6 May 2022
As regards deep geothermal we look for sources of heat and fracturing and these are mostly but not all in the southwest. Shallower reservoirs of heat exist, even in Lincolnshire, but these don’t lend themselves to heat for electricity generation but offer opportunities for local heating or assisted agriculture.

Many of the other energy initiatives looked at by ourselves and colleagues arise because the best sources of energy (whether gas, wind or geothermal) are often furthest from off-take infrastructure (pipelines or grid networks). Where grid and pipeline access is most abundant, problems of population density make local planning permissions very difficult. This stimulates research variously into gas to wire, hydrolysis of water for H2, waste to energy and storage.

Access to off-take, especially the electrical grid, is probably the biggest single hindrance to the development of alternative energy in the UK.

The British Energy Security Strategy identifies, further infrastructure is required to establish energy independence from overseas countries.

Can you please confirm, if framework opportunities to license from local authority owned lands, to generate energy arose, would Angus Energy be interested in being considered as the operator? Asked on 6 May 2022
Yes and our engagement with local councils has greatly improved over the last few years. The range of projects has also grown with geothermal, assisted agriculture and energy storage being some of the main points of interest. With our engagement in geothermal, we have found local authorities to be particularly welcoming and helpful.

Will the SFB sidetrack be drilled with continuous Gas production or will the gas production plant be turned off for the duration of the drill? Asked on 5 May 2022
Subject to final satisfaction of internal risk assessment SIMOPS are planned – i.e. simultaneous drilling and production. These is not an abnormal choice and indeed is common in far more restrictive areas such as offshore rigs. The plant when fully up and running benefits from a state of the art fire and gas leak detection, rapid blowdown and full set of monitoring and control instrumentation connected to a PLC as well as a full complement of alert operators.

Is there a forecast date for oil production at Lidsey oil field ?? Asked on 2 May 2022
We have been test producing at Lidsey and continue to encounter issues with the well-bore – including wax buildup and issues with pipe. We hope to update further on this field, including the possibility of side-track, when the team resources can be taken off Saltfleetby which is currently and rightly occupying our overwhelming attention.

Once the loan is clear,what would be the penalty costs to break the hedge as a rule of thumb. Thanks. Asked on 2 May 2022
There are not necessarily any significant penalty costs involved however the commercial cost is the difference between the forward curve prices for the period from the date at which the hedge is broken to the date of the scheduled maturity of the hedge versus the fixed hedge contract prices over that same period.

Thus the cost can only be known at the time the hedge counterparties determine to break or “counter hedge” it. In effect we would be taking out a new hedge for the residual period and amount but in the opposite direction – i.e. currently we are promising to supply Y therms for X pence/therm and to break the hedge we would be promising to buy Y therms for Z pence/therm. Z being the new forward curve prices and X being the original hedge contract prices.

In practice it would only make sense if we were interested in engaging in dynamic hedging – i.e. we felt we could do better trading in and out of positions over short contract months than the market. Generally speaking this is best described as gambling unless you have a large book of varied supply and distribution obligations and wish to balance it out in aggregate. At present we do not.

Hi, can I ask if the company is still in discussions with 2 interested parties for the sale of Saltfleetby, and if so, is the outcome of these discussions likely to be known and reported soon? Thank you. Asked on 2 May 2022
Discussions are continuing. Given the materiality of the disposal we are advised not to give further detail outside of RNS announcements.





Environmental impact appears to be one of the main concerns for individuals, who may have reservations on Angus expanding business operations, whilst satisfying the requisites of the Environment Act 2021 and associated legislation. Can you please provide an overview on what measures Angus have already taken and intend to develop upon, to ensure statutory compliance, corporate governance and innovative working practices, in regards to environmental sustainability. Asked on 2 May 2022
Thanks. Our principal regulators are OGA (NTSA), HSE and EA, and statutory bodies such as planning authorities. There is some overlap but less than might be helpful. Our compliance team now exceeds in number our technical team (excluding field operators), with two dedicated HSE liaisons, one EA liaison, one OGA liaison, one general planning and permitting lead.

We are a small company and the breadth of legislation, regulation, standards and so forth is daunting. Nonetheless our management systems have developed beyond recognition in the last two years and this is necessary when dealing with high pressure gas which is, after nuclear, one of the most hazardous businesses in the UK.

In terms of environmental compliance, the actual Saltfleetby Field presents fewer environmental hazards than a traditional oil field, as there is much less risk of fluid contamination to ground and water. Additionally electronic monitoring of flow has (for human safety) to be much more precise and involved than in traditional oil field practice. So on the whole we would regard the Saltfleetby Field as representing a much higher human safety risk but a much lower environmental risk than an oil field.

The exception is emissions to air. We require a flare at startup and some (but not all) maintenance events to acheive national grid specification gas, but otherwise we should not need to use the flare at all during the life of the field, although a tiny pilot flare is kept alight at all times to meet statutory requirements for emergency blowdown. Blowdown (i.e. flaring) for us means loss of principal inventory and commercial return – this is not an oilfield with associated gas as a headache. Gas is our reason for being here.

We have two scheduled group Zoom calls a day and, without any doubt, every day an issue of environmental compliance arises and is dealt with. At one level it is simply compliance (“what will EA think of this”) but at another level it is purposive (“what should we be doing or how could we do this better”). This is a sea change from the Angus of old.

We are committed to improving our carbon footprint – but we are led by an unforgiving Technical Director who rightly has regard to the “through-the-cycle” carbon cost of new equipment. Two innovations are planned – (a) a closed loop geothermal system for on site power generation up to 1MW and potentially retiring one gas fired generator and (b) a tie-up with a vertical farming operation which would take both heat, power for lighting and potentially CO2 emissions from the site for assisted agriculture.

We do, as a small company, adhere to the QCA. Up until December, on the strong encouragement of the Board, and whilst we awaited procurement and delivery of equipment to Saltfleetby, almost 50% of management time during 2021 was spent in developing our deep geothermal programme in southwest England. We are sincere in our desire to be an innovative part of Transition, but bear in mind that we are a small company at present focused on acting as a safe and responsible Operator in the immediate term and delivering good returns to those who have funded these operations..

Has a rig been ordered to drill the sidetrack yet?

Which month in 2022 do you expect the rig to arrive if so. Thank you. Asked on 2 May 2022
Yes. A rig was ordered in June 2021, considerable replacement parts for which were sourced from overseas. Although it was scheduled to be ready in October, none of the parts actually landed in the UK until December and as a consequence the rig itself would not have been ready until around now. This underlines the very real supply chain problems which we faced in H2 2021, and which continue to cause problems for many other Operators. If anything we think that the supply chain issues have gotten worse not better since then, and we are relieved to have our kit onshore.

There are alternative onshore rigs which we could have used for this side-track had we felt it necessary. The rig is undergoing testing and we do inspection reports and visits every three or four weeks. We are confident that it will be ready for moblisation at site at the end of June.

[3put] 27/6/2022 11:01

Does the company continue to be in discussions with the 2 interested parties in Saltfleetby? Asked on 30 May 2022
We have kept an open line to three participants. Non-binding offers have been tabled but they did not reflect the true value of the asset or were contingent on various milestones being met.

It is one thing to low-ball ahead of proof of success, but to low-ball and make a bid contingent on proof of success seems to be having one’s cake and eating it.

In short we were being faced with the same issue that the old Angus had with Horse Hill – sell out the asset at an undervalue ahead of final proof of success, or press on alone and indeed increase our stake in the asset. On this occasion we chose the latter.

[jtidsbadly] 27/6/2022 10:58

...and by the way, the gas price on 1 October 2021, the closest day to the date of the cPR, was about 228p/therm. That’s way above the current price. Care to re-do the figures, anyone?

[jtidsbadly] 27/6/2022 10:46

So you did, HITS, but I think we need to get away from the term “first gas”. It’s meaningless in the current context. We need to know, as your second question asks, the date when they’ll start producing gas for sale. “First gas” just leaves the Interim MD with wriggle room and scope for obfuscation.

I can’t understand why there are no Investor Questions. And I agree with you about Aleph.

[headinthesand] 27/6/2022 10:35

JTids, I asked both questions - agreed that the second is far more important.

[jtidsbadly] 27/6/2022 10:33

HITS: I’d prefer to be told the date of sales gas rather than “first gas”.

[gaffer73] 27/6/2022 10:26

That's the gas engines the compressors are on the opposite side of the site.