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B_A_B_A
As I see it, our future in AAOG is closely dependent on the success of ANGS. If ANGS succed we will be part of the outfit.
Our director Mr Forest is also the directorof ANGS who will be able to use the £42m of the tax losses into ANGS future revenue. Mr Forest could have reversed AAOG into any entity that generate revenue some2-3 years ago but did not. Why ? because he want to combine it with ANGS. I want ANGS to succeed so that AAOG can combine with it and we start trading. Thak you for pointing this out.
Is this AAOG Chatboard or ANGS?
I was going to buy at 0.6-0.8p but I did not. Some negative posters on the other site changed their stance to positve dependent on success of sidetrack. Lord Lugan must know some people with money who can step in. It all depend on what is happening at the well site. They should update people on the progress but they do not. I am hoping nothing serious they are encountering.
Petroleum1: apart from the fact that Angus has £5mm of debt service costs to pay the Lenders soon, from cash resources that they don’t currently possess, the loan is not their big problem: the big problem is the hedge contracts, on which they already owe something like £6mm, by my calculation, and possibly more. If they get the plant working at capacity in the first week and a half of September, they’ll break even that month, possibly a bit better. Thereafter, however, the increased volume from 1 October required by the hedge schedule cannot be achieved from the existing wells, so further big losses will be incurred that month. From November, they need a successful sidetrack to enable them to meet the requirements of the hedges. They haven’t currently got enough money to pay for a sidetrack, by my calculation and a sidetrack from that well is not certain to find the necessary volume of gas. Mercuria will be in a position to take Anguish over at any time if Mercuria want to.
This is AIM, though, anything can happen and investors are capable of deluding themselves for extended periods, so the price in the short term is not reliably predictable. Good luck with it if you’ve bought some.
OofyProsser
I used NPV (Net Present Value) numbers in the CPR. I am assuming that they have taken everything into account.
In any case when you \have a PRESENT NPV of the following magnitude,
NPV P90 = £387m
NPV P50 = £678m
and rising , Mercuria debt of £11 m become irrelevant. I am going back to the CPR and try to see if I can find out more information.
Yes, Petroleum1, it wasn’t very clear, sorry about that.
Have you taken into account the sums owed on the hedges to Mercuria, in your calculations?
https://www.bbc.co.uk/news/uk-politics-62604653
Interesting llink. Uk has much less storage caacity than anybody else. Rough field had shown leakage to surroundind areas . In my view this could be attributed to overpressurizing( cant take any more gas to store ) or rupture in the seal.
SFB is cheap to co convert to storage being onshore. I understand that some £2.5billion is being allocated to upgrade the Rough system.
OofyProsser
Dont understad the question
Is this AAOG Chatboard on ANGS ??
Petroleum1: there are two existing producer wells which are being commissioned with the rest of the plant. One is at Site A, half a mile away. The other is on Site B, long with SF07, the well from which the sidetrack is planned. The flare is in the corner of the extension site and there is a gas engine generator present. If Angus have been told they may drill it while producing gas, they haven’t told us, and they’re short of good news.
It may be easy to drill these sidetracks but several previous attempts from the SF07 well have been unsuccessful. It was not their preferred well to drill from - in fact when they were discussing their original first choice, SF05, they were somewhat dismissive of SF07.
If they manage to get it going from the start of next month at forecast levels, they’ll get some positive cash flow, it’s true, but the gas price will have to rise a lot more to enable them to meet their debt service charges that month. In addition, we don’t know what “a portion of” their 3rd quarter hedges means. One month’s worth? Two months? From October, they will be unable to meet the hedges without a successful sidetrack.
Re their cash position, of the £6mm they raised in May, £4mm was spoken for in immediate payments and a cash reserve required by the regulators and by the loan covenants. They had just £2mm. left for working capital. That was three months ago. They’re 10 weeks behind their May schedule. How can they order a sidetrack? What will they use for money? Mercuria may defer more of the hedges but that’s storing up more issues into the future. And Mercuria are in a position to require further compensation for doing Angus more favours. And unless they’ve got guarantees re this from Mercuria (or Aleph) they can’t very well enter into further contracts, can they? If they have got such guarantees, they should tell their shareholders,
OofyProsser
To me ,as a reservoir engineer, drilling successfully a sidetrack in a a reservoir with 19 years of history is straight forward job. Why do they have to mothball the plant while drilling the sidetrack miles away is incomprehensible.
If they manage to start the gas flow now I do not foresee any problem with the gas price so high. One poster on the other site was mentioning water cut as a killer but the post was deleted. Water cut in gas reservoir will not stop the well from flowing but will give problems at commissioning.
Petroleum1. Angus haven’t got permission for a sidetrack while they’re still commissioning the plant. They may not even be able to drill one while the plant is operating at all. In which case they’ll have to mothball the plant while they drill it. Lord Lucan says it will take 50 days, assuming no holdups. Well, he’s never got anywhere near meeting a schedule so far, in all his three and a half years at Angus. And there’s no guarantee they’ll find significant gas with it. It was budgeted, I think, in the CPR, at £2.8mm. That was last October. Inflation will have taken this sum well over £3mm. Where are they going to find the money for this? £5mm of debt service costs next month. A further very large loss on the hedges this month. Unbudgeted 5 months (and counting) work on the plant in excess of the mid-March schedule in the CPR. They’ve raised £6.6mm since end-March, when they had cash of £1.4mm and creditors of almost twice this number. G&A expenses of £1mm+ since then. Lots of new employees to man the plant, who have had to be trained. Do the sums and please tell me how they’re going to meet their bills over the next six weeks, even without starting a sidetrack. And they're required by the terms of the £12mm. loan Charge to maintain a significant cash sum at all times.
Mercuria is going to have to let them off paying even more money that Angus will owe them. Mercuria is a privately owned commodity firm, not a charity . Do you think they’ll give Angus something for nothing? Is Angus even a going concern?
Petroeum1: I see you are now interested in Angus Energy on its LSE site, where you are taking the very well-researched Headinthesand to task.
I think you will find, however, that the monthly forward contracts agreed between Angus and Mercuria for nine months from 1 October cover 1.75mm therms, not 1.5mm. The historical data suggest a 15% p.a. depletion rate, so they'll be short for the life of the hedges without a successful sidetrack. . The company is in hock to Mercuria. They will decide its future. They’d make more money by merely exercising the Loan Charge provisions. But there may be complications related to NSTA approval of a new owner. So they may merely require changes in the covenants giving them an even bigger share of the project’s revenues. Either way, Angus shareholders appear to be stuffed, no matter how hysterical the claims of the boiler room cabal.
Irishmouse
You will be a rich man if AAOG is combined with ANGS.
When the last CPR was made the gas price was 64p/therm. Now the gas price is 490p/therm.
https://tradingeconomics.com/commodity/uk-natural-gas
All evidence indicate that the preesent gas price will shoot up yet again when the winter season arrive.
Mr Forest could have reversed AAOG into any trading entity two years ago but he did not.
It is all quite now and no one knows what will happen next. I will not be surprised if the UK government do not get involved if not for the gas for this winter but for the gas storage possibilities of SFB. Rough gas storage is not an ideal place to store gas as there was some evidence in the past of gas leaks to surrounding areas around Rough reservoir.
Note: The production profile supplied in the CPR was based on reservoir simulation study carried out by the original owner assuming a wellhead pressure of 90 psi. If this pressure is decreased to say 50 psi the flowrate could increase siginificantly.