London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I think Angus is a typical AIM company that exists to keep its otherwise hard-to-employ Directors in well paid jobs. SEL appears to have essentially a free carried interest in the Saltfleetby project. Its liability in the event of a default is limited to its stake in the project. Angus’s liability under the loan terms extends to all its assets and it pays all the costs of bringing the project into production.
There are companies in London and everywhere else whose job is to look for financialy distressed companies. They offer to bail them out and in the process they end up owning them or stripping off some of their assets. I think that Forrest being an accountant know this fact and this is why he split Saltfleetby reservoir into two companes, Angus and Saltfleetby Energy . I am an engineer and not an accountant and I hope that Angus will survive.
Petroleum1: Angus haven’t got a single large shareholder, just Frazer Lang and his family, Knowe Properties etc. In my opinion, the FCA. and AIM should be taking a retrospective look at certain claims they made in 2020 in broadcast interviews re their financial requirements. They won’t though, AIM is generally, in effect, unregulated. I think Angus will remain unmolested by regulators until either Saltfleetby makes their fortune, or they get taken over either without compensation or for peanuts. There may be a chance that someone with deep pockets who wants the gas field for eventual gas storage purposes may be in the data room but I doubt it.
OofyProsser
Not sure if AAOG case will be similar to that of Petroceltic International case.
Petroceltic international violated the rules of Investment funds some twenty years ago. The latter took them to court and managed to own the company. Here is an extract from Wikepedia:
"The Company's shares were delisted on the AIM of the London stock exchange and the ESM of the Irish Stock exchange following a process of examinership, approved by the High Court of Ireland. The company is now a private company owned by Investment Funds under the management of Worldview Capital Management Limited."
The Lenders are commodity traders. They have arranged the hedges on 70% or so of the project’s expected production. These are not your friendly neighbourhood bank. If they’re on the other side of the hedges and haven’t covered them elsewhere, and Angus is incapable of meeting the hedge terms from July, what would you expect a commodity firm to do, who has screwed Angus down to extremely ungenerous loan terms and stands to make a great deal of money from the hedges? They must have a couple of capable young MBA’s among their staff who wouldn't mind having a project to manage. With deadlines.
I don’t know why the Lenders would be buying shares, either in the market or in the placing. Why would they do it, if they’re expecting to be able to take it over in the summer? And Angus is reliant on placings to make up any further shortfall. Borrowings and asset sales are closed to them.
I don't think lenders lend hoping for default, unless they are in the loan shark bracket. Are they?
irishmouse
You are talking about a gas reservoir whose net asset value is:
NPV P90= £213.5m
NPV P50=£376.75m
Plus other assets.
By lending £12m only in return for taking over all these assets, I would say everybody wants it.
I t has been said that Forrest may have other backers. I f he did , would he be in such predicament. I t would be nightmare senario if the recent placing went to the lenders themselves.
Gentlemen. I would assume that anyone taking a stake in Angus would be in negotiations with the lender as current agreements seem to be untenable. Yes the lender can on default take over the asset but do they really want it. A new owner could on different terms give the lender a good chance of getting a return.
Nomlungu: I’ve been following your, Mirasol’s and HITS’ admirable posts on the Angus site. There’s quite a lot of pretty ill-informed people to contend with there.
The reason I didn’t mention the royalty is that I seriously doubt that Angus will make it that far.
skittish,
Apologies - I had not read the entire thread and was not referring to you; I did not even realise there was a poster called 'skittish'.
I was making a sarcastic comment that the situation is even worse than OofyProsser pointed out, as the 8% royalty on gross revenue after the loan is repaid seems to siphon off a lot of the profits whilst avoiding any responsibility for abandonment costs by the lendee.
Skittish, I’ve just been back over the Wingas/SEL deal and can’t see it.
As for cash, it is referred to in the accounts of Wingas/SEL - the company was transferred with the cash in the bank account. Wingas and SEL are the same entity of course, simply different names, as I'm sure you appreciate. Ownership of the shares in that company were transferred from The Russian Federation to Forum Energy Services Limited.
As for being a ramper, maybe I am a bit, but with AAOG, which is my only interest here, it is difficult to ramp as they are delisted.
Skittish: further to our conversation re SEL/ Wingas, can you recall where you saw the data re the cash paid by Wingas to SEL/ Paul Forrest?
"Skittish"? You sound more like a ramper to me, but I am less enthusiastic; you omit:
"an override of 8% on gross revenue following repayment of the facility"
Of gross revenue, not even profit. Not even after wages...
Skittish: that’s me!
Gazprom sold him its UK Wingas subsidiary, which owned the Saltfleetby gas field (which had been closed for 18 months following the closure of the Theddlethorpe refinery), in May/June 2019, apparently for a nominal consideration. They also gave him £12.5mm (was it? Or £14nm? for site abandonment provisioning. Wingas was renamed Saltfleetby Energy Ltd later that year. Their offices were next door to Angus Energy’s and a deal was arranged - we don’t know when or how - with the Earl of Lucan, who had been appointed to the vacant MD job at Angus earlier that year following the Tidswell share dealing scandal and subsequent ousting of Paul Vonk, though he had no knowledge of oil or gas or experience in the industry.
Lucan bought the gas field for £1, plus £2.5mm for either an abandonment reserve or to bring the field back into production by installing refining facilities and connecting pipelines at an existing site to replace what had previously been done at Theddlethorpe. Lucan said the £2.5mm would more than cover the cost.
Since then, Saltfleetby has cost probably £2-3mm of Angus’s pre-existing cash, after which they spent a year negotiating a £12mm loan to finish it. They’ve had several placings in addition. The loan is at usurious rates and requires repayment of capital and interest, combined, of c. £4.5mm this summer. There are, in addition, hedge contracts over most of the expected gas production, which if not met will result in losses to Angus - possibly very large ones.
There are charges on the loans which forbid asset sales without the approval of the lenders and entitle the lenders to take over the assets of both Angus and SEL (the latter are guarantor of the loan) in the event that they don’t make the payments.
Saltfleetby is very late and it looks to the more analytical followers of Angus as if they are quite likely to fail to finish it in time to meet the payments.
All the assets in SEL (according to the May 2020 latest accounts) apart from some inter-company balances and £750,000 in cash, are the pipeline and gas site assets bought from Wingas. If they can’t make the payments due in June/July, the lenders may own SEL’s assets. Where the abandonment liability will reside, for which Wingas paid them all that money, is a moot point.
The suggested shuffling of part of SEL’s share of Saltfleetby into another company may well turn out to be a rearrangement of the deck chairs on the Titanic. The revaluation in the SEL accounts reflects the write back of the abandonment provision, since the gas field no longer appears to need such a reserve, being brought back into production again. It’s not clear what happened to the rest of the money that was not passed on to Angus, or if there was any. If he paid himself a dividend, he’s done well! Unless he finds himself liable for abandonment costs one day.
Sorry just read your post in full, of course you were aware of it.
Skittish, did you spot that he was made a director of AAOG last week ?
I know that some on here do not seem to rate Paul Forrest much in terms of financial acumen, and he does seem to present as as something of a provincial accountant of likely modest means, however it appears to me that he may have hidden talents.
For example, on 17-6-2019 he acquired the stranded Saltfleetby Gas Field via ownership of Saltfleetby Energy Limited (SEL) from Gazprom. We have never been told how much he paid (bearing in mind his limited means), but I'd hazard it was £1.00.
Whatever he paid, SEL was the recipient of not only the gas field but also £14M in cash inherited from Gazprom as "decommissioning costs", as at that time it was apparently intended the field would never be brought back into operation; and also £61M in tax losses.
On 19-6-2019 SEL sells, for £1.00, 51% of the gas field to ANGS, paying them £2.5M in decommissioning costs for the liability they were now taking on - in the short space of 48 hours the field is now viable once more.
ANGS is co-opted to resurrect the Saltfleetby field, tapping its own shareholders as required.
So over the space of two days (17-9-2019 to 19-9-2019) Mr Forrest turns a £9M profit, via the suddenly reduced decommissioning costs - and later ANGS says that even the £2.5M was too high! And SEL's 49% share of such decommissioning costs is now shown as £700K in their accounts.
Not only that, but SEL's latest accounts (1-1-2019 to 31-5-2020) show that it made £12M profit - we don't have access to the P&L, just the balance sheet showing accumulated losses falling from £61M to £49M - probably by shifting the worthless "abandoned assets" into the valuable "soon to be producing assets" column.
He then uses some of the £14M given on the sale by Gazprom to buy up 25% of AAOG for £500K and acquire effective control of a company which has a further £42M of accumulated losses against with future profits can be written off. Not satisfied with that, SEL grants AAOG an option for a mere £8M in shares to buy 25% of the previously worthless Saltfleetby. Last week he was sufficiently influential to be appointed a director of AAOG.
So, in the space of 3 years Mr Forrest, with no visible major means of support,
acquires a stranded gas field,
achieves control of SEL and AAOG, is appointed a director to both
co-opts ANGS into resurrecting Saltfleetby,
"pockets" (not personally) £9M+ from Gazprom which is then used to pay for SEL's share of the resurrection,
grants AAOG an £8M option to acquire 25% of the previously worthless Saltflletby
makes a £12M profit in the SEL accounts,
and acquires effective control of company losses to be set against otherwise taxable profits, totalling £103M.
For someone with little financial acumen, he doesn't appear to be doing so bad.
He must think he's won the Lotto.
And I don't think his backers are Filipino.
And I wonder who bought some of the 175M new shares ANGS issued last week?
mmafr
RMP was an oil and gas small cap co in Greenland. After it went bust due to drilling a dry hole It relisted as FME, a miner in Australia after 2 yrs suspension.
But the share has already been suspended from trading for some time, hasn't it?
And if it is revived, it will certainly be in a new company. AAOG will probably no longer exist under this name. Actually, shortly before the suspension of trading, you should have buy more (which I did).
Also I am going to watch the situation after first gas and see whether I should increase my investment in AAOG. I have already averaged down 4 times in the past and final average is 2.2p.
OofyProsser
In short , the way I see it is that AAOG has £42m in tax benefit and this is alot of many for any company. This had made the company to be taken away and hidden for two years so that it can be used now. RMP in the same situation and I recovered one third of my investment so far. I am still waiting to recover my investment from AAOG. Apart from hedge restriction I see this is a better investment than that of RMP.
Oofy, I don’t feel that you butted in, I welcome any one who posts their views on any board as long as it is rational and has some bearing on the company. If we ever do get resisted the umpa lumpa’s will invade the board so let’s enjoy our time here for as long as it lasts.
irishmouse: yes, I understand. I only butted in here to share my view on developments at Angus but it hasn’t helped anyone invested in this, I appreciate that. I hope it will come good for you here, somehow.
Oofy, Re Paul Forrest, we don’t know what he has or his intentions for the company, but he and forum are the only chance we have at this moment in time.