George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.
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WG818,
For Angus, I will rely on Angus's accounts, the most recent of which are those to 30/09/20.
Note 20 explains their policy re decommissioning costs (as does note 3.14).
Ocelot.
The OGA will consider both partners de-comm commitments though won’t they.
If and when Angus finally get the loan, if they are then responsible for the new higher De-comm commitments , they would appear in the accounts then. They are not going to put them into the accounts without having the liability yet are they?
It’s worth considering that that could run into the millions.
It says SEL's last accounts were made up to 31/12/18.
The last accounts of ANGS were made up to 30/09/20.
From note 20 to Angus's accounts:
The Group makes full provision for the future costs of decommissioning oil production facilities and pipelines
on the installation of those facilities. The amount provision is expected to be incurred up to 2029 when the
producing oil and gas properties are expected to cease operations.
These provisions have been created based on the Group’s internal estimates and expectation of the
decommissioning costs likely to incur in the future. For the period under review, the directors have assessed
that the discount rate and inflation rate to be applied to the current cost of decommissioning to be similar.
On this basis, the current cost is considered to be similar to the discounted net present value.
As described in note 12, the additional provision was relating to the acquisition of Saltfleetby gas field during
the year.
Hi Ocelot
The £12.8 million are from SALTFLEETBY ENERGY LIMITED last showing accounts.
https://find-and-update.company-information.service.gov.uk/company/00953066
When Forum took over the field abandonment notice was applied presumably until the De-comm issue had been resolved and a new FDP approved.
As gkb points out there is a large discrepancy between the two figures SEL show and that of Angus. Presumably that subsurface pipeline is a large chunk of that?
... as the accounts showed £12.8 million De0Comm costs.
--------------------
WG818,
The accounts of which company as of which date, please?
Ocelot
From the original agreement RNS.
Note this section. (excluding existing subsurface pipework beyond the immediate sites) The company has posted a question regarding this on the Q&A but the September RNS reads to me like they are now liable for 51% of this also? Obviously this needs resolving either way to remove the Abandonment notice from the field which the OGA applied when Wingas became Saltfleetby Energy Ltd.
Key Terms of the Farmin Agreement
The terms of the Agreement are that Saltfleetby Energy will pay to Angus Energy Weald Basin No. 3 Limited ("AWB", a wholly owned subsidiary of the Company, together the "Group") an initial contribution of £2.5 million which funds will then be applied by Angus either (a) to assume 100% of the costs to be incurred during the reconnection of the Field to the National Gas Grid or (b) to satisfy all abandonment costs at the Field (excluding existing subsurface pipework beyond the immediate sites)
https://www.lse.co.uk/rns/ANGS/acquisition-of-interest-in-saltfleetby-gas-field-0who5mtzc2ef525.html
Morning Ocelot
Yes but the field includes the 8.1 km pipeline which which is presumably what the rest of the £12.8 million money is for?
The OGA will still want to know how this is ultimately going to be paid for at end of life!
Are Angus now liable for 51% of this if the deal goes through as the September RNS suggests they will?
Reminder of the RNS of 18/08/20:
Reduced Decommissioning Liability
In accordance with the Company's policy of maintaining a minimal well stock sufficient only to fulfil its production aims, Angus Energy plc (AIM : ANGS) is pleased to announce a further review of its abandonment liabilities at the Saltfleetby Gas Field.
Specifically the Company has obtained firm quotation for the abandonment of Wells 6 and 7 for an aggregate total of GBP335,000 ex VAT. Together with the GBP70,000 of costs of abandoning Wells 1 and 3, already successfully completed, the total cost of decommissioning four of the field's eight wells will be less than GBP405,000 as against an original gross estimate of GBP1.75 million for decommissioning all eight wells (excluding GBP0.75m of site restoration costs) of which Angus share is 51% ...
GBP1.5 million of the £12m debt facility goes toward an abandonment reserve for the Field. (RNS of 23/09/20)
And £2.4m toward a reserve for the planned sidetrack.
Sorry that link doesn’t work.
Google OGA public wellbore search
Pedl5 in three licence number box.
James2
I’m afraid the OGA have a verry comprehensive document on the subject that debunks that.
https://www.ogauthority.co.uk/media/5003/financial-guidance-august-2018.pdf
The FDP (field development plan) also went into then over 15 months ago which still requires authorization.
Then you also have the Fact that the OGA placed an abandonment notice on the field when Mr. Forrest/Forum took over. Presumably as the accounts showed £12.8 million De0Comm costs.
They are still showing as Abandoned and there are a few more to De-comm than they would have you believe!
https://itportal.ogauthority.co.uk/edufox5live/fox/edu/
License number PEDL5
OGA approval is nothing more than a mere formality. OGA do not interfere in such matters.
Mirasol, thanks.
Surely you wouldn't announce the finance RNS without the bits and bobs being a forgone conclusion.GL would have to resign due to the embarrassment amongst the city slickers.
"So the only thing that may cause the funding deal to fail is OGA approval of the royalty arrangement."
i I don't think the OGA have ever interfered with a commercial decision - unless this is really weird it'll go through on the nod.
Looking at the conditions in the RNS again,
(1) Setting of the hedge - no issue will be set closer to the time when gas can be produced.
(2) Regulatory approval of the royalty arrangement by OGA - No guarantees that OGA will approve, it may not.
(3) Handful of administrative provisions - No issue, I cannot see anything here to worry about.
So the only thing that may cause the funding deal to fail is OGA approval of the royalty arrangement.
Any comments from those that know about these things, is beyond my depth. What is the likelihood of OGA not approving the royalty arrangement?
I see Ocelot (who for recent months has been struggling with no material to spin PR puff and nonsense about) has a new lease of life. Still very determinedly economical with the truth, though.
No, precisely nothing has been derisked as of yet.
Sorry, but ANGS is all about Poundland. Brockham's an utter no-hoper, Lidsey much the same and Balcombe has no panning permission (which is a good thing in my book, because it prevents George using it as a distraction and ptetending that it is in any way viable). And don't even get me started on Holmwood or decades-long magic pixie dust geothermal projects in Cornwall.
There is nothing for ANGS but Poundland. To maintain otherwise is to be both deliberately disingenuous, calculatingly misleading and even more obviously a company PR mouthpiece.
Reminder that the IPO, back in late 2016, was at 6p and that Angus is not all about Saltfleetby, even if Saltfleetby is, understandably, the focus of attention at the present time.
What if they are right to be excited about Lidsey?
Agree.
The share has been stuck in the doldrums for so long, when it does, at last, begin to rise, think it may surprise by how far it rises and for how long it continues to rise.
I share your sentiments. I think that all the warrants will be exercised next month latest as the company updates. We should be above 2 pence very soon.
Hi Takeyourbets. I'd be much more willing to believe that we are "full de-risked" if I was certain of what the re-completed well (or wells) was able to produce. With the field having been shut in for so long, there's no easy way to know how an individual well will perform until it's actually put onstream. Even so, I'm ever hopeful, perhaps like our board and Frazer Lang.
After yesterday’s announcement I personally believe we are full de-risked. Added another £4K to my holding here can only see this going back to 2-3p sooner rather than later. Gla