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Yes HITS It is getting a bit close to the wire. Still if you look on Angus wed sight letter dated the 14th June you'll read that the main work has been completed. The final stage is nitrogen testing. I believe this also has been completed on the final transmition skid. some 3to 5 days after to first gas. this is now within period we are now in with a few days to spare. May be we shall see a better price on SP to buy over the next couple of days. yes there is always a risk but if you buy on the dip the rewards if any are that much greater. all be said I do believe in GL will come through this challenge. if you not then you should have sold your shares, if any , some weeks ago.
HITS, you have only mentioned the 3 years, SBY has a life of 9 to 15 years, so another possible 6 to 12 years unhedged producion to Angus plus other income projects to come. No doubt GL is already working on the next deal right now, as mentioned in the video the 49% deal was done when the SP was 1.4p.
Say ANGS manages to achieve production of 1.5 million therms per month throughout the next 36 months (not looking too likely now for July, but we'll presume it does).
That would be 54 million therms of production over the next three years - and the total gross revenue on that, using latest gas futures pricing would be £109.2 million.
Now because ANGS has hedged pretty much all of that 54 million therm production, out of that £109.2 million, it is contractually obliged to pay Mercuria £86.8 million, leaving itself just £22.4 million of gross revenue over the next three yhears.
That would result in Saltfleetby delivering a net loss over the next three years, because of the £20+ million obligations ANGS has already tied to the field (the c. £14 millon loan plus interest payback and the £6.25 million cash part of the 49% acquisition from FESL). Throw in three years of fixed and variable field opex costs and you've got a nett loss over those three years.
Now of course, if ANGS is successful with its sidetrack and that does double production up to 3 million monthly therms say from Oct 1st, then ANGS would benefit from spot market rates from all that unhedged excess gas produced.
This time, the field would deliver over £208 million in gross revenue over the three years. Now sure, Mercuria still gets its £86.8 million (that of course does not change)... but ANGS would get over £120 million of gross revenue over the 36 months - and that's a literal game changer.
All of which is why it's crucial for ANGS to a) drill a successful sidetrack and b) get that second compressor in on time.
Silverlight, it's rather naive to expect LSE admin to ban anyone for stating cold hard and easily verifiable facts, no matter how uncomfortable you may find said facts.
What Mirasol has said about how the hedge operates is absolutely accurate. ANGS has contractually hedged 52.125 million therms of production over the next three years and starting from next month to be sold at average pricing of 43.7p per therm.
The result of that - using very latest monthly gas futures pricing - is that Mercuria is owed over £86 million by ANGS over the next 36 months, regardless of how much or how little gas ANGS produces.
Mirasol, still waiting for your reply, under water or mega loss, if none of the aforementioned you are a paid troll which is all the shareholders assumption on here. I will help you out " i'm a shareholder myself" now that's not hard to say is it, now it's your turn " all together now".
to 'LSE Admin' - asked for this creature to banned 6 times now, how many posts no does he/she/it need to post nonsese on a share holders chat forum for this to happen? Your platform is becoming a laughing stock. ill report the posts once last time .. M - I suggest you leave of your own accord, you wouldn't do this in real life so have some self respect and don't do it hiding behind a keyboard. GET A LIFE.
"They have committed to deliver a set volume of gas and a good guess at what the future price of gas is"
Yes and no -they had to raise cash last year - the only way they could do it was to hedge some of their future production. Mercuria guaranteed a price as set out in the CPR and various RNS's - ANGS guaranteed a volume every month starting in July 2022. Absolutely fine, nothing wrong with that.
Then of course Russia attacked Ukraine and the gas price went up - doubled, tripled, ....... Mercuria are now sitting on a possible gold mine as they will buy the gas for $0p approx and sell at between £ 1.60 and whatever. ANGS still get their 40p.
However if ANGS don't produce enough gas they have to pay Mercuria for the CONTRACTED volumes
This could be a very very large number
That's the problem with hedging - you have to be able to deliver .
It will only be the temp works for the rig and crew makes sense as all the construction kit is on site. Simples. Gla. Silence is never good when Angs the ones being quite. But ha ho been here to long to cash out now.
ANGS has contractually committed to sell a fixed volume of gas (that volume ranges between 1.125 million therms and 1.75 million therms, depending on the month) at a fixed price (that price ranges between 35.25p per therms and 52.05p per therm, depending on the month) over the next 36 months.
If ANGS produces more gas than it has hedged in any given month, it may sell any excess at the then (almost certainly miles higher) spot market rates.
If ANGS produces less gas than it has hedged in any given month, it then has to effectively "buy" any shortfall at the then (almost certainly miles higher) spot market rates to sell at the much lower hedged price.
(Actually, what ANGS will do is simply pay the differential in each month's swap contracts to Mercuria, the party on the other side of the hedge).
Sorry was meant to say Volume vs price Let me know if I've got this completely wrong They have committed to deliver a set volume of gas and a good guess at what the future price of gas is
So if price is 3 times the predicted price of gas then would revenues not be 3 times higher than predicted revenues and we will still get paid for what ever gas is produced don't they so it will help if they do not meet volumes of gas need???